Economic Outline

flag Brunei Darussalam Brunei Darussalam: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Sultanate of Brunei is the third largest oil producer in Asia and the fourth largest exporter of liquefied natural gas. Crude oil and natural gas production account for over 50% of the country's GDP and virtually all of its exports, thus Brunei has suffered the brunt of the drop in the price of hydrocarbons in recent years. The private sector remains underdeveloped (3% of GDP); most companies are SMEs (in the textiles, furniture, food sectors). As a result, the country is a large importer. Economic growth reached 3.9% in 2019, on the back of a modest recovery in global oil and gas prices, decreasing to +1.2% in 2020 due to the COVID-19 pandemic, and then coming back at +2% in 2021 (IMF, 2022). According to the updated IMF forecasts GDP growth is expected to reach 2.5% in 2022 and 2.6% in 2023, subject to the post-pandemic global economic recovery.

Due to the decline in oil revenues, the state budget decreased largely in the past years, resulting in a estimated fiscal deficit 1.12 billion USD, which is expected to decrease gradually in the coming years. Indeed, according to the Centre for Strategy and Policy Studies (CSPS), Brunei is poised to experience a budget shortfall for the eighth year running in 2022 after the fiscal deficit worsened in 2021. The CSPS also noted that the weaker non-oil and gas sector also resulted in declining revenue, while COVID-19 economic measures such as tax and duty exemptions further contributed to lower receipts in 2020 and 2021. Nevertheless, the country’s debt-to-GDP ratio remains extremely low, at 3.2%. Despite recent global inflationary tendencies, Brunei's prices continue to be highly stable, with an annual average inflation rate of 2.5% in 2021, and is projected to decrease to 1.5% over the forecast period (World Economic Outlook IMF, 2022). The Sultan of Brunei, Hassanal Bolkiah, has been reigning since 1968. Though he appears to enjoy popularity amongst his population, the decision to apply the Islamic Sharia law in the country has caused some criticism. The State is now supporting small and micro businesses as well as the training of the population to achieve economic growth. There have also been significant investments in the field of education. With the Sharia Law, Islamic banks are growing rapidly in the country. Given that energy reserves are becoming depleted, the Government has been pursuing a policy of economic diversification, speeding up investments in the manufacturing and the service sectors; however, these efforts have so far produced mixed results. To stimulate growth, the Government has increased development expenditure, by launching a high-voltage transmission line project between Malaysia and Brunei and developing an international airport. Emphasis has also been placed on banking supervision and financial reforms.

The Sultanate of Brunei has one of the highest per capita GDP rates in Asia (almost USD 33 979, according to IMF estimates), but unemployment rate reached 9.6% in 2021 and is expected to remain stable in the following years. Citizens pay no taxes and the Government guarantees free medical services and education up to university level and give housing and rice subsidies. The country has no official measurement of a poverty line, but UN reports indicate that around 5% of the population is impoverished. In 2022, policies will focus on diversifying the economy from oil and gas. The success of the Hengyi petrochemicals plant will represent progress, but Brunei’s fortunes will remain linked to global oil and gas prices.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 13.47e12.0015.6916.2615.72
GDP (Constant Prices, Annual % Change) 3.9e1.1e2.02.62.4
GDP per Capita (USD) 29,31426,06133,97935,14933,907
General Government Balance (in % of GDP) 0.00.00.00.00.0
General Government Gross Debt (in % of GDP) 2.62.92.32.22.3
Inflation Rate (%) -0.41.9e2.51.51.0
Current Account (billions USD) 0.900.540.720.890.98
Current Account (in % of GDP) 6.64.54.65.56.2

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Brunei Dollar (BND) - Average Annual Exchange Rate For 1 MUR 0.040.040.040.040.04

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 2.0 20.8 77.3
Value Added (in % of GDP) 1.2 59.1 41.5
Value Added (Annual % Change) 11.7 2.9 -1.9

Source: World Bank - Latest available data.

 
Socio-Demographic Indicators 20212022 (e)2023 (e)
Unemployment Rate (%) 6.86.86.8

Source: IMF – World Economic Outlook Database - Latest available data

 

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The Active Population in Figures

201820192020
Labour Force 219,838217,006217,212

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 69.13%70.15%68.53%
Men activity rate 75.65%77.43%76.63%
Women activity rate 61.97%62.15%59.66%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
66,6/100
World Rank:
57
Regional Rank:
11

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
6/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
154/180

Source: World Press Freedom Index, Reporters Without Borders

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Sources of General Economic Information

Main Online Newspapers and Portals
Brunei News
EIN News Brunei
BruDirect
The Bruneian News
BBC Country Profile, Brunei
Useful Resources
Ministry of Finance and Economy
Monetary Authority of Brunei Darussalam (AMBD)
 
 

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Latest Update: May 2022