Bandar Seri Begawan -Over the past 10 years, Brunei Darussalam has enjoyed a steady growth in Gross Domestic Product (GDP) at an average of 1.3 per cent annually. However, this has decreased to 0.2 per cent, which is worrying trend for the Sultante.
Hence, it is vita for the private sector to make significant progress in economic diversification efforts to help sustain the Sultanate's future economic growth as the oil and gas sector is experiencing a slight reduction in growth. The country has to maintain a five to six per cent GDP annually to possess a sustainable long-term economic growth.
The economic projection was revealed by Awang Haji Abdul Amin bin Haji Hashim, the Deputy Director-General at the Department of Economic Planning and Development in his presentation on the 10th National Development Plan (2012-2017) at the French Bruneian Business Association's (FBBA) talk at the Radisson Hotel. Also at the talk were Mr Jean Yves Berthault, the Ambassador Designate of France to Brunei Darussalam with Mr Pierre Imhof, the President of FBBA as well as other members and diplomats.
Awang Hj Abdul Amin said, "Brunei has a small economy and in 2011, the country's Gross Domestic Product was about B$20.6 billion at current prices. Due to the small population of 393,372, the Sultanate's per capita GDP is quite high at B$52,315. This has been aided by the oil and gas sector, which accounts for 68 per cent of GDP. In terms of world ranking, Brunei is in the top 30."
Based on statistics in GDP by Expenditure for 2011, he said, "Brunei is an open economy with 51 per cent comprising export, majority is from the oil and gas sector. Our worries lie on the amount of investment, which is capital formation recorded at 13 per cent while the benchmark is around 20 per cent to sustain the economy, which is low. We are working hard to attract foreign investment to Brunei.
"Fortunately, the government has been accruing a budget surplus except for 2009 when the government experienced a budget deficit as the oil and gas played a major influence and prices of oil went down drastically"
In terms of inflation, he explained, "The country was also fortunate to experience a generally low inflation in 2012 at as per cent. Major issues that increased inflation rates were recent hike in prices, of imported food and beverages." From the external sector, about 95 per cent of exports were from the oil and gas sector in 2011.
The Deputy Director General of the Department of Economic Planning and Development also revealed that the Brunei Darussalam's GDP growth projection, for short-term (2011-2013) has shown a slight reduction.
"In 2011, the economy recorded a growth of 2.2 per cent but in 2012, we expect the economy to slow down to 1.6 per cent. We have seen the statistics for three quarter in 2012 and observed several declines in the economy.
We may revise it to lower figures. Hopefully the third quarter of 2012 will be better to help increase the overall performance of the economy."
In 2013, he said, "We expect a lower figure this year based on the projection and expectation from the oil and gas sector due to a reduction in its production.
However, in the past few years, the private sector has helped to some extent by maintaining a positive growth of an average three per cent. We need a double digit growth from the non-oil sector to boost the overall growth of the economy."
In summary, he said, "We currently have stable and low inflation, a steady exchange rate, low unemployment rate but in terms of economic growth, more catching up needs to be done".
--Courtesy of Borneo Bulletin