Asian Development Bank: Brunei's Economic Growth 2014-2015

LEO KASIM

BANDAR SERI BEGAWAN, Tuesday, October 21, 2014 - BRUNEI could see a further contraction in its gross domestic product (GDP) growth rate for this year and the next unless oil and gas production recovers, the Asian Development Bank said in its latest report.

In its recent Asian Development Outlook 2014 (ADO 2014), the ADB said the Sultanate is on track for a 1.1 to 1.2 per cent growth in GDP for 2014-2015 provided that the country manages to recover some of its declining hydrocarbon production.

Brunei’s oil and gas production declined in three consecutive quarters, falling by 10.3 per cent in the first quarter of 2014 from last year.

“Assuming some recovery in hydrocarbon production, forecasts are retained for slight economic growth this year and next,” the Manila-based lender said.

The ADB said that lower production in the oil and gas sector reduced GDP by 3.3 per cent in the first quarter, following a contraction by a revised 1.8 per cent in 2013.

The bank said shutdowns and maintenance of production facilities in the first half of the year squeezed production.

Meanwhile, the non-oil and gas economy comprising services, construction and manufacturing, expanded by 3.1 per cent in the first quarter of this year.

According to its earlier report in April, daily oil output has declined by nearly 40 per cent since 2006 due to managed production, facility maintenance and oilfield depletion.

Production of crude oil fell to 134,460 barrels per day in the second quarter of 2013 from 154,240 in 2012, it added.

The bank also said that Brunei’s GDP would be driven by a gradual expansion of the non-oil and gas sectors and some recovery in oil and gas production.

Growth in 2014-2015 will depend on the pace of infrastructure construction under the national development plan after seeing a decline in GDP by 1.4 per cent last year on the back of a contraction in the oil and gas sector.

The speed of growth in 2014-2015 will depend on the implementation of public projects under the plan for 2012 to 2017 which have sometimes lagged behind the schedule.

Some of the infrastructure projects the report cited were the oil refinery and aromatics crackers project at Pulau Muara Besar, airport expansion and development of three major bridges.

The Brunei Times

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