SERI BEGAWAN, Dec 16 — The Asian Development Bank (ADB)
expects the Brunei economy to contract by 1.2 per cent in 2009 before
recovering in 2010 to grow 2.3 per cent fuelled by higher global energy
demand and prices.
In an economic outlook for the region released Tuesday, ADB said the
Brunei economy will shrink this year because of lower demand for oil.
“This economy, which relies on exports of oil and natural gas for
about half its GDP (gross domestic product), is expected to contract by
1.2 per cent in 2009 owing to lower world demand for energy and the
fall in energy prices from last year,” the ADB report said.
In 2008, the Brunei economy shrank 1.9 per cent. ADB said government
spending is tempering the contraction and the non energy sector is
expected to perform better in 2009.
“Growth is set to resume in 2010 at just over two per cent,
supported by higher global energy demand and prices and by the start of
exports from a US$450 million methanol plant,” the bank said.
“The government is stepping up its efforts to diversify the economy:
one result will be an increase in the number of Brunei Halal Brand
products exported next year,” it added.
ADB said inflation is expected to stay subdued in view of lower
prices this year for imported commodities and the government’s policy
to subsidise a broad range of products and services.
The inflation projections are maintained at 1.5 per cent for 2009 and 1.2 per cent for 2010.
“Large current account surpluses based on exports of energy are
expected to moderate in the forecast period as a result of lower oil
prices and reduced income flows from investment abroad,” ADB said.
The bank raised growth forecasts for the region, now predicting
growth of 4.5 per cent in 2009 and 6.6 per cent next year after a
better-than-expected recovery in the September quarter.
In its September outlook, the bank forecast the region to grow 3.9
per cent in 2009 and 6.4 per cent in 2010. — NNN-BRUDIRECT/The Brunei