Record Oil Prices Up Budget Surplus
By Azlan Othman

Bandar Seri Begawan - The escalation in oil prices have increased Brunei's budget surplus and total exports in the first quarter 2005, the latest Economic Bulletin revealed.

It was also revealed that the Sultanate recorded another trade surplus during the first quarter (Q1) 2005 but this was due to a large extent by a drop in import of nearly all items.

However, this seasonal decline may change as consumer demand and construction needs may increase again in second quarter 2005 consistent with expected growth rates in the wholesale and retail trade, construction and transport and communication sectors.

The surplus enables the government to accelerate further the implementation of the Eighth National Development Plan projects during Q2 2005. The contribution of the government to the overall growth of the economy will be supported by these developments.

The quarterly magazine, published by the Department of Economic Planning and Development also revealed that the average Consumer Price Index (CPI) for Q 1 rose marginally and this is one of the indications of a growing consumer market. Similarly, advertisement for job vacancies showed laudable increments compared to the previous quarters. These and other indicators provide the source for as growing economy in second quarter 2005.

In Q1 2005, Brunei experienced a budget surplus of $99.1 million, a decrease of 81% from $389.26 million in Q4 2004. This was due to an increase of 14.8 in the total expenditure against a 5.3% decrease in total revenue.

Government revenue fell slightly from $1,729.04 million in Q4 2004 to $1,637.28 million in QI 2005. It was mainly because of a decline in the receipts from the oil sector by 5.9% from $1,611.98 million in Q4 2004 to $1,516.64 million in QI 2005.

The percentage contribution of tax revenue dropped slightly from 59.5% ($1,028.52 million) in Q4 to 57.2% ($936.01 million) in Q1 2005. Non tax revenue contribution, on the other hand rose from 40.5% ($700.52 million) to 42.8% ($701.27 million) over the same period.

Government expenditure increased by $198.39 million from $1,339.78 million in Q4 to $1,538.17 in first quarter 2005.

Meanwhile, total exports in Q 12005 was $2,380.9 million. This was an increase of 3.1% from $2,309.9 million in Q4. Exports were still dominated by oil and gas which contributed 93.3% of total exports.

However, total imports in Q1 2005 were $520.4 million which was a 13.8% drop from the Q4 2004 imports of $604.1 million. The decline in imports was mainly due to the decrease in the imports of miscellaneous manufactured articles followed by beverages and tobacco, manufactured goods, crude materials inedible, food and live animals, miscellaneous transactions and machinery and transport equipment.

The increase in imports of animals & vegetable oils and fats, mineral fuels and chemical imports were not able to offset the decline in imports.

CPI It rose marginally by 0.6% compared to the previous quarter. It also recorded an increase of 1.5% when compared to the same period last year. The CPI for January, February and March 2005, stood at 102.0, 102.4 and 102.4 respectively.  -- Courtesy of Borneo Bulletin

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