Brunei’s economy expanded by a strong 4.2 percent growth rate in 2024. Primarily driven by the recovery of the oil and gas sectors which had been in decline since 2020, this performance exceeded expectations of an average 3 percent growth rate among domestic and regional forecasts. The pandemic and delays in the completion of rejuvenation activities in the oil and gas sector have significantly reduced output growth in the last three years.
Strong recovery, however, began in the fourth quarter (Q4) of 2023, with growth accelerating to 6 percent until the third quarter (Q3) of 2024. This level of growth in the first three quarters of the year was second only to Vietnam and placing Brunei as one of the fastest growing ASEAN economies during this period. Such high growth was also possible as the country was coming from a low base. Sustaining it at such high level is challenging, considering that it is well above the estimated steady state growth path of Brunei. Hence, it is expected that from 2025, base effects will cause the growth rate to normalize towards the estimated steady state growth rate of 1.5 to 2.0 percent range.
The highlight of the economy in 2024 is the continued expansion of the non-oil and gas sector's contribution to the economy. The sector now accounts for over 50 percent of the economy. Diversification efforts focused on the downstream oil and gas industry have played a key role in this shift. This structural change has also been reflected in the export sector, with non-oil and gas exports now making up 70 percent of total exports, up from less than 10 percent in 2019. Nonetheless, within the non-oil and gas sectors, the downstream segment represents only 20 percent of the total, indicating significant potential for further growth in the coming years.
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