Your thoughts on the Brunei economic climate. How has your business survived during these challenging times?

3 years 5 months ago #3 by aperez
aperez created the topic: Your thoughts on the Brunei economic climate. How has your business survived during these challenging times?
As we are all aware,
  • Brunei's Gross Domestic Product (GDP) growth rate is lowest amongst its ASEAN members
  • Brunei's GDP growth rate has worsened with the lower energy prices and subdued production of oil and natural gas impacting further on the country's economic climate.
  • Government expenditure had also contracted and companies reliant either directly or indirectly on the oil and gas industry and the spin-off thereof have either downsized or closed down since 2013.
Although there is no reduction to Government employee salary, the uncertainty of the economic climate impacted on consumer spending from government employees. In fact, the overall consumer confidence in the country took a major hit and this had a major impact on the performance of businesses in Brunei Darussalam, with several companies defaulting on their loan, downsizing and/or closed down.

  • Brunei's economy advanced 3.6 percent year-on-year in three months to March of 2016, following an upwardly revised 0.1 percent growth in the previous period. The expansion was mainly driven by a rebound in oil and gas production (+7.6 percent from -0.2 percent in Q4).
  • In contrast, non-oil and gas output shrank (-1.9 percent from +0.6 percent), due to contraction in agriculture, forestry and fishery (-15.1 percent from 2.5 percent in Q4) and services (-0.7 percent from +1.1 percent in Q4). Quarter-on-quarter, the GDP expanded 0.3 percent.
  • GDP Annual Growth Rate in Brunei averaged 0.37 percent from 2004 until 2016, reaching an all time high of 6.60 percent in the second quarter of 2010 and a record low of -8.10 percent in the fourth quarter of 2013.

According to the International Monetary Fund (IMF) Brunei Darussalam's GDP growth rate have decreased since 2012 with a growth rate of 0.95% compared to 2011 of 3.42%. Thereafter GDP growth rate further contracted to -1.75% (2013), -2.34% (2014) and -0.5% (2015).
  • In response to the decline in the country's economic growth, Brunei Darussalam government implemented reforms in 2015 to attract foreign direct investment, support the economic diversification from the oil and gas industry, and encourage private sector growth.
  • GDP growth rate is projected to soar in the coming years with the promise of new projects in the downstream sector.
Source: Oxford Business Report 2015

The Asian Development Bank (ADB) recently published in their economic report that Brunei Darussalam will see a projected growth of 1% in 2016 and 2.5% in 2017. Note that the IMF is more conservative with a projected growth rate of 0.5% for 2016.

But with the recent outcome of the US President election and the US decision to withdraw from the Trans Pacific Partnership (TPP) Agreement, it is uncertain whether this would further impact negatively on Brunei Darussalam's economy. It is likely that there would be more focus on developing businesses in ASEAN and the expanded market of the Plus 1 – China, Japan and Korea and other Dialogue Partners - Australia, New Zealand, EU and Russia.

If you are a business: Share with us on how your business survived during these challenging times.
  • Did you need to restructure your company during this lean time, if so what exactly did you or your employees do to get through these challenging times.
  • What would you like to see related government agencies do to support business during these challenging times?
  • What is your business advise to other businesses undergoing difficulties?
If you represent a government related agency: Share with us on how your agency have supported businesses during these challenging times.
  • What type of support program have you delivered to support businesses and how can it support business during these challenging times.

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