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ECONOMIC OVERVIEW
Brunei Darussalam Key Economic Developments (BKED) Q2 2021




Brunei Darussalam's economy contracted in Q2 2021, extending the previous two quarters of negative growth. The downturn was mainly due to slowdowns in both upstream and downstream oil and gas industries with shutdown turnaround and maintenance activities among the contributing factors. Notwithstanding, the Non-Oil and Gas Sector remained firm as several subsectors reined in double-digit growths. Notably, Wholesale and Retail Trade continued its uptrend for the fourth consecutive quarter, backed by robust domestic demand as border closures remained intact; while Hotels and Restaurants benefitted from the gradual uplifting of restrictions and buoyant domestic tourism activities. Meanwhile, improvements were also seen in Fisheries, stemming from increased production in both capture and aquaculture activities; and Livestock & Poultry, arising from higher production of buffalo, goat and broiler meat as well as chicken eggs.
The uptrend in consumer prices resumed in Q2 2021 with price gains seen in both the food and non-food categories. Price hikes in food were mainly driven by beef & buffalo meat and oil & fat-related products with rising import costs as the primary factor. Meanwhile, elevated prices in the non-food category were mainly attributed to higher costs of transport and restaurants with the latter citing increased costs of contract catering packages from costly food items.

Total exports climbed to its highest level since 2012, however was offset by a strong upsurge in imports, subsequently bringing about a trade deficit in Q2 2021. Outsize growth in exports was underpinned by petrochemical exports, which continued to gather momentum, clinching a new record-high since its onset in Q4 2020. Meanwhile, exports of mineral fuels (crude oil, LNG and methanol) increased, gaining primarily from higher prices despite lower export volumes. On the other hand, the steep rise in imports corresponded with developments in the petrochemical industry, importing sizeable volumes of mineral fuels, required as feedstock for production.
The trend of fiscal deficit persisted in Q2 2021 despite rising revenues and declining expenditures on y-o-y terms. A steady rebound in oil and gas export prices primarily lifted revenues while the detraction in expenditure was on account of reductions in both other charges annual recurrent (OCAR) and development expenditure as a number of major National Development Plan (RKN) projects have neared or seen completion.
 



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KEY ECONOMIC INDICATORS

GROSS DOMESTIC
PRODUCT
INFLATION
INTERNATIONAL
MERCHANDISE TRADE
UNEMPLOYMENT
RATE
1.2%1.9%
BND 1.8 BILLION
(SURPLUS)
6.8%
2020202020202019