Brunei’s economy, ASEAN’s smallest member, suffered its biggest contraction in five years in 2021, falling 1.6% as oil and gas production woes continued to hamper recovery from the Covid-19 pandemic.
Brunei’s gross domestic product (GDP) growth has slumped in all four quarters of 2021 amid the worst recession since oil prices collapsed in 2016.Official figures show the economy shrank by 1.4% in the final quarter of 2021 due to pandemic-related restrictions Restrictions have affected some sectors of the economy, local news outlets reported exclusive news Among them, the Ministry of Economic Planning and Statistics of the country was mentioned.
Brunei’s highly reliable hydrocarbons sector has been underperforming since 2020, falling 4.8% last year despite rising global oil prices. The oil and gas sector, which accounts for 50.4% of Brunei’s fourth-quarter gross domestic product, has been facing a drop in output and was cited as the main reason for Brunei’s economic weakness.
Decline in oil and gas production
“The reduction in crude oil and natural gas production is due to shutdown turnaround activities,” the department said in a press statement released over the weekend.
It added that the drop in liquefied natural gas (LNG) production was due to limited gas supply and maintenance activities at one of the country’s major LNG plants. Manpower shortages and ageing oil and gas fields further lead to a pullback in oil and gas production in 2021.
Oil production fell from 105,000 barrels per day in the fourth quarter of 2020 to 103,400 barrels per day in the fourth quarter of 2021. LNG production also fell to 774.1 billion thermal units per day from 901.1 billion thermal units per day in the same period last year. period.
Possible recovery in 2022
Analysts expect Brunei’s economy to bounce back from recession in 2022 as higher energy prices are expected to drive growth in the hydrocarbon sector and most Covid-19 control measures have been lifted.
The improved economic outlook is also due to the downstream oil and gas sector, which is set to expand as the state-owned Brunei fertilizer industry starts producing ammonia and urea in the first quarter.
The non-oil and gas sector – which in Brunei’s case includes downstream oil and gas activity – maintained positive momentum, growing 1.4% year-on-year in the final quarter of 2021. Growth was driven by the services sector, which rose 2.1% in the quarter as Brunei began easing restrictions on Nov. 19, including allowing dining in restaurants and businesses able to operate at half their normal capacity.
Aviation industry rebounds
Driven by the return of more passengers, the air transport sector recorded the highest growth of all sectors in the fourth quarter of 2021 at 83.6%. Other sectors in positive territory include land transport, other transport services, finance, government services, business services and health.
By contrast, service sub-sectors suffering from lost profits include restaurants, wholesale and retail trade, and water transportation.
Overall, the services sector accounted for 35.4% of Brunei’s GDP in the fourth quarter.
Other growth sectors, albeit with smaller volumes, are agriculture, forestry and fishing. In the fourth quarter of 2021, these industries grew by 6.1% due to increased small-scale and commercial fishing activities and growth in sawn timber production.
Brunei’s economy, ASEAN’s smallest member, suffered its biggest contraction in five years in 2021, falling 1.6% as oil and gas production woes continued to hamper recovery from the Covid-19 pandemic. In 2016, Brunei recorded a drop in gross domestic product (GDP) growth in all four quarters of 2021, which was the worst recession since oil prices slumped in 2019. The economy shrank by 1.4% in the final quarter of 2021, official data showed. Local news outlet The Scoop mentioned the country’s…
Brunei’s economy, ASEAN’s smallest member, suffered its biggest contraction in five years in 2021, falling 1.6% as oil and gas production woes continued to hamper recovery from the Covid-19 pandemic.
Brunei’s gross domestic product (GDP) growth has slumped in all four quarters of 2021 amid the worst recession since oil prices collapsed in 2016.Official figures show the economy shrank by 1.4% in the final quarter of 2021 due to pandemic-related restrictions Restrictions have affected some sectors of the economy, local news outlets reported exclusive news Among them, the Ministry of Economic Planning and Statistics of the country was mentioned.
Brunei’s highly reliable hydrocarbons sector has been underperforming since 2020, falling 4.8% last year despite rising global oil prices. The oil and gas sector, which accounts for 50.4% of Brunei’s fourth-quarter gross domestic product, has been facing a drop in output and was cited as the main reason for Brunei’s economic weakness.
Decline in oil and gas production
“The reduction in crude oil and natural gas production is due to shutdown turnaround activities,” the department said in a press statement released over the weekend.
It added that the drop in liquefied natural gas (LNG) production was due to limited gas supply and maintenance activities at one of the country’s major LNG plants. Manpower shortages and ageing oil and gas fields further lead to a pullback in oil and gas production in 2021.
Oil production fell from 105,000 barrels per day in the fourth quarter of 2020 to 103,400 barrels per day in the fourth quarter of 2021. LNG production also fell to 774.1 billion thermal units per day from 901.1 billion thermal units per day in the same period last year. period.
Possible recovery in 2022
Analysts expect Brunei’s economy to bounce back from recession in 2022 as higher energy prices are expected to drive growth in the hydrocarbon sector and most Covid-19 control measures have been lifted.
The improved economic outlook is also due to the downstream oil and gas sector, which is set to expand as the state-owned Brunei fertilizer industry starts producing ammonia and urea in the first quarter.
The non-oil and gas sector – which in Brunei’s case includes downstream oil and gas activity – maintained positive momentum, growing 1.4% year-on-year in the final quarter of 2021. Growth was driven by the services sector, which rose 2.1% in the quarter as Brunei began easing restrictions on Nov. 19, including allowing dining in restaurants and businesses able to operate at half their normal capacity.
Aviation industry rebounds
Driven by the return of more passengers, the air transport sector recorded the highest growth of all sectors in the fourth quarter of 2021 at 83.6%. Other sectors in positive territory include land transport, other transport services, finance, government services, business services and health.
By contrast, service sub-sectors suffering from lost profits include restaurants, wholesale and retail trade, and water transportation.
Overall, the services sector accounted for 35.4% of Brunei’s GDP in the fourth quarter.
Other growth sectors, albeit with smaller volumes, are agriculture, forestry and fishing. In the fourth quarter of 2021, these industries grew by 6.1% due to increased small-scale and commercial fishing activities and growth in sawn timber production.
