Brunei’s economy is recovering robustly, supported by macroeconomic stability. Fiscal challenges persist due to global energy volatility. Structural reforms and diversification remain crucial amid uncertain global conditions.
Brunei’s Economic Outlook
Brunei’s economy is showing a strong recovery with stable macroeconomic indicators and modest inflation. Backed by prudent fiscal policies and robust external positions, it remains resilient against global challenges like energy market fluctuations and shifting trade dynamics. However, structural reforms are facing difficulties due to these external pressures. The ASEAN+3 Macroeconomic Research Office (AMRO) has released its 2025 Annual Consultation Report on Brunei, based on data collected until May 30, 2025, highlighting these observations.
Economic Developments
Brunei’s growth is driven by the oil and gas sectors, complemented by non-oil sectors like trade, air transport, and communication. The agri-food and tourism industries are recovering well. Projected growth is expected to stabilize at 2.0% from 2025 to 2026. Inflation remains low due to reduced costs in transport and communication, while the current account surplus supports the external position, despite a predicted decrease due to softening global energy prices. Fiscal deficits are rising, indicating challenges in energy markets.
Addressing Risks and Future Policies
To handle economic risks, maintaining a prudent fiscal approach is crucial, utilizing fiscal reserves wisely. AMRO suggests strengthening fiscal frameworks for sustainability and intergenerational equity. The Currency Board Arrangement with Singapore supports monetary stability. Priorities include financial risk assessment in offshore lending and enhancing trade integration to attract foreign investment. Promoting competitiveness in labor markets and the non-oil sector, alongside supporting digitalization for MSMEs, will drive future growth.
About AMRO
The ASEAN+3 Macroeconomic Research Office (AMRO) monitors and assists in the macroeconomic stability of ASEAN+3 members, providing impartial analysis and policy recommendations. The Annual Consultation Report reflects these efforts, offering insights into economic conditions and guidance for addressing regional challenges.
