IMF国际货币组织全球-Brunei-Darussalam_2019-Article-IV-Consultation_54页_3mb

2019 Article IV Consultation with Brunei Darussalam: Summary

Core Content

The IMF Country Report No. 19/310 outlines the results of the 2019 Article IV consultation with Brunei Darussalam, detailing the economic performance, policy responses, and recommendations. The consultation focused on the country's transition from reliance on oil and gas (O&G) to a more diversified economy, while addressing fiscal sustainability, financial sector development, and macroeconomic stability.

Main Economic Developments and Outlook

• Economic Adjustment: Brunei's economy has been adjusting to lower O&G prices since 2014, which led to large budget deficits and narrower current account surpluses.
• Reforms: Authorities launched a comprehensive reform program in 2015 aimed at ensuring long-term fiscal sustainability and intergenerational equity, and promoting economic diversification through improving the business climate, developing the financial sector, attracting foreign direct investment (FDI), and supporting micro, small, and medium-sized enterprises (MSMEs).
• Growth Performance:
  • 2018: Growth slowed to 0.1%, impacted by unscheduled maintenance in O&G fields.
  • 2019: Growth is expected to rise to 1.8%, driven by O&G sector expansion and large investment projects.
• Inflation: Average inflation was 0.1% in 2018, turning negative (-0.2%) in 2019.
• Current Account: The current account surplus decreased to 7.9% of GDP in 2018, due to increased imports from large infrastructure projects, but is expected to rebound over the medium term.
• Fiscal Balance: The fiscal balance recorded a surplus in FY2018/19 for the first time since the 2014 oil price shock, but is expected to deteriorate in 2019 due to lower O&G prices and higher capital spending.

Key Risks and Challenges

• Near-term Risks: Lower-than-expected O&G prices or production could reduce fiscal revenues and exports, with significant spillovers to the non-O&G sector.
• Unemployment: Unemployment remains high, with the unemployment rate at 9.3% in 2017 and youth unemployment at 28.9%, higher than in ASEAN and GCC countries.
• Fiscal Sustainability: While fiscal consolidation has made progress, more ambition is needed to align the fiscal position with intergenerational equity.
• External Shocks: The peg to the Singapore dollar remains appropriate, providing stability and a credible nominal anchor, but the external position is weaker than fundamentals in 2018.

Policy Recommendations

• Fiscal Policy: Continue fiscal consolidation, reform subsidies, and improve public financial management.
• Structural Reforms: Enhance the business climate, human capital, FDI attraction, and global integration, while leveraging digital innovations.
• Financial Sector Development: Strengthen micro- and macroprudential policies, develop financial infrastructure, and ensure financial stability and integrity.
• External Sector: Maintain the peg to the Singapore dollar and monitor external risks, especially from offshore banking assets.
• Data Compilation: Improve data collection and dissemination to enhance transparency and support informed policy-making.

Executive Board Assessment

The IMF Executive Board endorsed the staff appraisal, highlighting:

• Substantial progress in fiscal consolidation, business climate improvement, and financial sector development.
• The peg to the Singapore dollar is appropriate and has contributed to macroeconomic stability.
• The external position is weaker than fundamentals in 2018, but expected to recover with new downstream exports.
• The non-O&G growth is improving, supported by RKN11 and large FDI projects.
• Unemployment, especially youth unemployment, remains a challenge.
• Digitalization and a formal medium-term fiscal framework are recommended to support long-term sustainability and spend control.

Key Indicators

Conclusion

Brunei Darussalam has made significant progress in economic diversification, fiscal reform, and financial sector development, despite the ongoing dependence on O&G. The IMF encourages continued reforms, enhanced data transparency, and further fiscal consolidation to ensure long-term sustainability and resilience. The peg to the Singapore dollar is seen as a credible anchor, and the external position is expected to improve with new downstream exports and fiscal recovery.