Brunei’s economy expanded by 1.4 percent in 2023, and growth is expected to strengthen to 2.7 percent this year, as exploration and development activities in offshore oil and gas (O&G) fields gather pace. Encouragingly, the non-O&G sector is expected to continue to lead the economic recovery, driven by the expansion in the downstream activities, agri-food, transportation, and tourism sectors.

Inflationary pressures have eased, reflecting lower commodity prices and the normalization of supply chains following the pandemic. While headline inflation decelerated sharply to 0.4 percent in 2023, food inflation remained higher than pre-pandemic levels, driven mainly by cereals, meat, and dairy produce. This would have direct knock-on effects on prices of feedstocks, translating to higher domestic cost pressures. Headline inflation is projected to increase to 1.4 percent this year. The Currency Interchangeability Agreement (CIA) with Singapore as well as administered prices and subsidies remain appropriate in fostering price stability. These have helped anchor macroeconomic stability in Brunei.