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ECONOMIC OVERVIEW
Brunei Darussalam Key Economic Developments (BKED) Q1 2021



A steady and sustained growth of the Non-Oil & Gas Sector was the highlight in Q1 2021, buoyed by encouraging developments in manufacturing, led particularly by the petrochemical industry. Several service subsectors also registered upturns in growth including Wholesale & Retail Trade, bolstered by increased domestic demand reflected in high retail sales; Business Services due to a rise in demand for professional and technical services of oil and gas-related activities; Health Services backed by an increase in both private and government services activities; and Finance Services, sparked by rising sales of life insurance policies. Nevertheless, declines in oil and gas production proved a major setback, which inevitably weakened the overall growth of the economy.
The trend of rising inflation rates continued in Q1 2021 with prices of both food and non-food items edging higher compared to the same period last year. Price hikes in food items were primarily seen in meat, vegetables and fruits with high domestic demand and limited supply among the contributing factors. As for non-food items, higher prices were mainly observed in transport, communication and recreation & culture.


Trade balance turned surplus in Q1 2021 despite higher imports and lower exports compared to the same period last year. The decline in total exports was in view of weakened export demand for crude oil and LNG coupled with lower price of LNG although crude oil price picked up slightly. Notwithstanding, total exports marked a clear recovery, reaching considerably higher values compared to the past few quarters where global demand and trade activities were prevalently disrupted by the COVID-19 pandemic. In addition, exports from the petrochemical industry continued to increase, providing boost to the country's overall exports. Correspondingly, developments in the petrochemical industry was reflected in the import of mineral fuels, increasing by more than double, predominantly driving the increase in total imports.
Fiscal deficit widened in Q1 2021, marred by steep declines in government revenue, offsetting the decrease in government expenditure. A fall in oil and gas exports generally led to the decline in government revenue while lower government 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 having 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