Brunei Economic Outlook 2021

Brunei’s economy is projected to expand by 2.8 percent in 2021, after growth had slowed to an estimated 0.7 percent in 2020. Growth in 2021 is expected to be largely supported by the mining and manufacturing sectors as external demand strengthens. The services sector is expected to rebound, but travel and tourism is unlikely to recover swiftly. The current account surplus is projected to remain high, reflecting a robust trade surplus. The fiscal deficit is projected to narrow on an improved outlook for oil and gas prices. Inflation is expected to moderate, after a steep rise in 2020.

However, these forecasts could be derailed by a materialisation of downside risks, which includes new waves of infections, delays in the development and deployment of a safe and effective vaccine, weaker-than-expected global growth and commodity prices, and unanticipated domestic oil and gas supply disruptions.

Immediate policy priorities should focus on sustaining the public health response, supporting affected and vulnerable households and firms to revitalise growth and jobs, strengthening the fiscal position by expanding the revenue base to ensure long-term sustainability, and accelerating structural reforms to seize new growth opportunities.

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