Brunei Darussalam: 2023 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Brunei Darussalam

IMF Staff Country Reports, October 6, 2023

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Brunei Darussalam: 2023 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Brunei Darussalam

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Bibliographic details

• Published: October 6, 2023
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400255762.002

Overview

• The 2023 Article IV Consultation discusses that Brunei has begun to recover from the pandemic, with coronavirus disease 2019 (COVID-19) restrictions lifted and borders reopened in 2022.
• Brunei’s high vaccination rates have allowed for the removal of COVID-19 restrictions and reopening of borders; however, reduced oil and gas (O&G) production have undermined the recovery.
• High fuel prices helped strengthen the fiscal and external positions in 2022.
• Inflation hit a historical high but has recently declined.
• The government is committed to diversifying toward a low-carbon economy.

Macroeconomic developments and outlook

• Growth in 2023 would remain negative due to extended O&G infrastructure maintenance.
• Non-oil sectors will contribute positively to growth, aiding diversification.
• Inflation is anticipated to moderate further.
• The overall fiscal and external positions are projected to weaken in 2023 and the medium term.

Fiscal and external positions

• High fuel prices strengthened fiscal and external positions in 2022.
• Projection: fiscal and external positions weaken in 2023 and the medium term.

Financial sector

• The financial sector remains liquid and well capitalized.

Structural policies and diversification

• The government is committed to diversifying toward a low-carbon economy.
• Non-oil sector growth is expected to help the diversification agenda.

Policy recommendations and priorities

• Prioritize human capital development and digitalization.
• Strengthen the regulatory framework for public private partnership.
• Consider more extensive participation in regional trade and economic partnerships.

IMF Staff Country Report No. 2023/346

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