Brunei’s economy has recorded the largest quarterly improvement by percentage since 2016’s recession with 6.7% growth from April to June (Q2) 2019 on the back off increased crude oil and gas production.
Brunei’s gross domestic product for Q2 stood at $4.741 billion, rebounding from 0.5% contraction in Q1, as the oil and gas industry grew 8.7% to $2.91 billion, accounting for 60.5% of the nation’s economy.
Crude oil production increased from 97.6 thousand barrels per day to 115 thousand barrels per day, while Liquefied Natural Gas (LNG) increased from 888,696 British thermal units per day (MMBtu) to 984,284 MMBtu per day. Natural gas production also rose from 32 million cubic metres to 34.3 million cubic metres.
The increases in production were able to offset lower crude oil and LNG prices, which declined 5.1% and 10.4% respectively compared to the same period last year. Q2 has typically been a period of lower oil and gas production for Brunei in previous years.
The non-oil and gas sector also increased by 4.1%; buoyed largely by an increase in investment and banking services which lead to a 21.8% growth in the finance subsector.
Other notable increases include; electricity and water by 12.9%, health services by 15%, air transport by 10.9%, education services by 9.1% and wholesale and retail trade by 5.5%.
The agriculture, forestry and fishery industry also improved by 0.3% to $45.8 million due to increases in livestock, poultry, commercial fishing and sawn timber. Production of vegetables and fruit declined by 7.3%.
JPKE’s GDP growth rate is based on constant prices, an inflation adjusted measure for the value produced by an economy over a given year. Current prices meanwhile reflect the market value of goods and services.
Unadjusted for inflation, Brunei’s highest GDP in the past two decades was recorded in 2012 at US$19.048 billion, before dropping for four consecutive years to US$11.401 billion in 2016, largely due to a downturn in oil and gas prices.
As oil and gas prices began to recover, Brunei’s economy grew 1.3% to US$12.28 billion in 2017 and then to US$13.567 billion in 2018, according to data from the World Bank.