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(Brunei Darussalam, 21st) Brunei's economic recovery after the pandemic has been strong, thanks to low inflation and a stable macroeconomic environment. The country's economic growth rate reached 4.2% in 2024, marking the highest increase since 1999, primarily driven by a strong rebound in the oil and gas upstream and downstream industries. The service industry also continues to develop steadily, with wholesale and retail, air transport, and communications sectors showing the most outstanding performance. It is expected that economic growth will stabilize at 2.6% from 2025 to 2026.
Looking ahead, the Brunei government will continue to promote economic diversification and is committed to aligning its development strategies with long-term sustainable development and low-carbon transition goals.
The above assessment was made by the ASEAN+3 Macroeconomic Research Office (AMRO) after conducting an annual consultation visit to Brunei from April 17 to 23, 2025. The visit was led by AMRO Deputy Group Leader and Chief Economist Anthony Tan, with AMRO Director Kouqing Li and Chief Economist Hoe Ee Khor also participating in the policy dialogue. Both sides conducted in-depth discussions on Brunei's recent economic developments and outlook, the spillover effects of rising U.S. trade protectionism, and Brunei's long-term development priorities.
Anthony Tan stated, "With oil and gas production returning to stability after a strong rebound last year, economic growth is expected to stabilize at 2.6% between 2025 and 2026. The active development of agriculture, food, and tourism industries will also help support short-term growth."
Since 2023, Brunei's overall inflation rate has continued to decline, turning negative last year due to declines in transportation, communications, clothing, and footwear prices. Inflation is expected to remain low, averaging slightly below 1% from 2025 to 2026, mainly due to declining food and energy prices.
In terms of external economy, Brunei remains strong, benefiting from a large current account surplus and ample foreign exchange reserves. However, affected by global energy price declines, the surplus is expected to narrow to 12.4% of GDP in 2025, down from 14.5% in 2024. At the same time, increased demand for imported transport and tourism services will expand the services account deficit, leading to a slowdown in the overall current account surplus.
Fiscally, the budget deficit for the 2024 fiscal year is expected to widen to 12.5% of GDP, reflecting the impact of reduced oil and gas revenues. With global energy prices expected to remain stable, short-term fiscal deficit pressure remains high.
In a globally highly uncertain environment, the risks to Brunei's economic growth prospects are broadly balanced. Short-term risks include potential disruptions in oil and gas production, larger-than-expected declines in energy prices, and weakened demand from major trading partners. Long-term challenges include international geopolitical instability and uncertainties in the global decarbonization process, which may pose obstacles to economic diversification goals.
The report points out that given the high volatility of oil and gas revenues, Brunei should maintain a prudent fiscal stance. Strengthening rule-based fiscal frameworks will help enhance policy credibility and promote more effective fiscal planning and decision-making. Expanding the scope of fiscal data coverage, such as compiling consolidated budget accounts, will also help strengthen risk monitoring, improve transparency, and enhance accountability mechanisms.
In the financial sector, supervision of cross-border banking lending activities should be strengthened, and relevant risk management frameworks should be improved to further maintain financial stability.
The report also suggests that deepening economic connections and trade integration through bilateral and regional free trade agreements will help improve market access and attract more foreign direct investment amidst the backdrop of increasingly fragmented global trade.
Strengthening local development capacity in non-oil and gas industries remains key. Enhancing labor market flexibility and competitiveness, promoting the development of micro, small, and medium enterprises (MSME), and accelerating digital and green innovation will be the main drivers of future economic growth.
AMRO appreciates the active cooperation and candid exchanges with Brunei authorities and participating institutions during this consultation, providing significant support for the smooth progress of this visit.
Looking ahead, the Brunei government will continue to promote economic diversification and is committed to aligning its development strategies with long-term sustainable development and low-carbon transition goals.
The above assessment was made by the ASEAN+3 Macroeconomic Research Office (AMRO) after conducting an annual consultation visit to Brunei from April 17 to 23, 2025. The visit was led by AMRO Deputy Group Leader and Chief Economist Anthony Tan, with AMRO Director Kouqing Li and Chief Economist Hoe Ee Khor also participating in the policy dialogue. Both sides conducted in-depth discussions on Brunei's recent economic developments and outlook, the spillover effects of rising U.S. trade protectionism, and Brunei's long-term development priorities.
Anthony Tan stated, "With oil and gas production returning to stability after a strong rebound last year, economic growth is expected to stabilize at 2.6% between 2025 and 2026. The active development of agriculture, food, and tourism industries will also help support short-term growth."
Since 2023, Brunei's overall inflation rate has continued to decline, turning negative last year due to declines in transportation, communications, clothing, and footwear prices. Inflation is expected to remain low, averaging slightly below 1% from 2025 to 2026, mainly due to declining food and energy prices.
In terms of external economy, Brunei remains strong, benefiting from a large current account surplus and ample foreign exchange reserves. However, affected by global energy price declines, the surplus is expected to narrow to 12.4% of GDP in 2025, down from 14.5% in 2024. At the same time, increased demand for imported transport and tourism services will expand the services account deficit, leading to a slowdown in the overall current account surplus.
Fiscally, the budget deficit for the 2024 fiscal year is expected to widen to 12.5% of GDP, reflecting the impact of reduced oil and gas revenues. With global energy prices expected to remain stable, short-term fiscal deficit pressure remains high.
In a globally highly uncertain environment, the risks to Brunei's economic growth prospects are broadly balanced. Short-term risks include potential disruptions in oil and gas production, larger-than-expected declines in energy prices, and weakened demand from major trading partners. Long-term challenges include international geopolitical instability and uncertainties in the global decarbonization process, which may pose obstacles to economic diversification goals.
The report points out that given the high volatility of oil and gas revenues, Brunei should maintain a prudent fiscal stance. Strengthening rule-based fiscal frameworks will help enhance policy credibility and promote more effective fiscal planning and decision-making. Expanding the scope of fiscal data coverage, such as compiling consolidated budget accounts, will also help strengthen risk monitoring, improve transparency, and enhance accountability mechanisms.
In the financial sector, supervision of cross-border banking lending activities should be strengthened, and relevant risk management frameworks should be improved to further maintain financial stability.
The report also suggests that deepening economic connections and trade integration through bilateral and regional free trade agreements will help improve market access and attract more foreign direct investment amidst the backdrop of increasingly fragmented global trade.
Strengthening local development capacity in non-oil and gas industries remains key. Enhancing labor market flexibility and competitiveness, promoting the development of micro, small, and medium enterprises (MSME), and accelerating digital and green innovation will be the main drivers of future economic growth.
AMRO appreciates the active cooperation and candid exchanges with Brunei authorities and participating institutions during this consultation, providing significant support for the smooth progress of this visit.