Brunei, officially known as Abode of Peace, is the second smallest country in Southeast Asia . Brunei had 423,196 population according to a census held in 2016, making it the least populated country in the region. Despite its cramped area coverage and small population, Brunei is considered as one of the two developed countries in Southeast Asia, alongside Singapore.
The Kingdom ranks fifth wealthiest nation in the world. Brunei’s GDP per capita is also the second highest in the region, with USD 31,436 per population. Even with a significant rate of income and a high level of consumption behaviour, the government still supports its citizens with subsidized housing, food, and healthcare.
Massive oil and natural gas reserves have a significant importance in the prominence of Brunei’s economy. Its oil reserves have a production capacity of 180,000 barrels a day and it is also the world’s ninth largest exporter of liquefied natural gas. The extensive oil and natural gas productions have helped Brunei to exhibit a staggering 56% of GDP growth during the 1990s until the 2000s and developed Brunei into an industrialized country. Currently, oil and natural gas exports account for 97% of Brunei’s total exports.
Import activities also play a major role in Brunei’s economy, such as petroleum and a few other selected products that are produced locally. In order to fulfill its domestic demand, a wide variety of commodities must be imported to the country. Brunei itself has several global trade partners, such as Japan, Australia, Singapore, Malaysia, and neighboring countries in the region. It is necessary for Brunei to import and build trade partnerships with other nations to keep up with its own robust consumption.
Brunei economy, however, has experienced a slowdown in recent years. The instability of global oil price has disrupted Brunei’s economy, that is highly dependent on oil and gas commodities. The country also cut down the petroleum production in response to the plummeting global oil price, this has reduced Brunei’s aggregate income within these past several years. In addition, its population’s high rate of consumption has pushed imports further and weakened the economy. In 2018, Brunei recorded the lowest GDP per capita in the country’s history as the GDP shrunk by 13 percent over the span of seven years. The economy now seeks to grow further in the coming years as the nation’s oil production and prices are predicted to become more stable in the future.
In order to help strengthen the economy, several initiatives have been planned by the Bruneian government to reduce its dependence on oil and natural gas production. Diverse foreign investments across numerous countries are being done by Brunei Investment Agency, the government's representative for foreign investment issues, to establish a substantial foreign reserves. Several attempts have also been conducted in the past, yet the country hasn’t been able to diversify their petroleum-focused economy. Currently, Bruneian government is attempting to diversify the economy by boosting non-oil and non-gas sectors in the country, such as the agricultural and maritime sectors.
After the recessions that occurred in recent years, the energy sector, as the cornerstone of Brunei economy, will be recovering as oil and gas refineries resume their normal production. Big infrastructure projects, such as industrial fertilizer plant and 30-kilometers Temburong Bridge, will also support the growth of the economy. Moreover, it is predicted that Brunei’s GDP will grow by 2.6% in 2019 and further increases by 2.9% in 2020.
The country’s economy may have faced a slowdown as it being impacted by the uncertainties of global oil market over the past few years. However, the economy is starting to gain its momentum and expected to deliver growth in the coming future. Growth’s trends in many different economic sectors may present opportunities that can be seized by businesses willing to enter, grow, and expand in Brunei.
Market Research Brunei seeks to help clients and businesses in Brunei and Southeast Asia with innovation market consultancy and growth strategy advisory. Through our exhaustive strategy recommendation and comprehensive B2B market research, we aim to help local enterprises and multinational corporations to enter, expand, as well as seek growth in the robust economy of Brunei.
Our team is fully dedicated to deliver insightful roadmaps for our clients that would be effective to support capturing market share and profit within Brunei and even wider Southeast Asia economies. Market Research Brunei employs a team of professionals committed to conduct extensive analysis around market trends and industry perspective, market intelligence supported primary research, and collaborations with our competent and experienced partners.
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