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Fiscal and Monetary Review – Q1 2005

CONTENTS

EXECUTIVE SUMMARY 2

GLOBAL SHORT TERM ECONOMIC REVIEW 3

REAL SECTOR DEVELOPMENTS Overview

Oil and Gas Sector Non-Oil and Gas Sector InflationOutlook for 2005

44556

EXTERNAL SECTOR DEVELOPMENTS Overview

ExportsImportsTrade Balance International Reserves

67899

FISCAL SECTOR DEVELOPMENTS Overview

Fiscal Position Government Revenue Government Expenditure

999

10

MONETARY AND BANKING DEVELOPMENTS Overview

Monetary Developments Interest Rates Banking Indicators Structure of Lending Non-Performing Loans Other Financial Developments

11111313131414

APPENDIX TABLE 1: Real Sector Indicators

TABLE 2: External Sector Indicators TABLE 3: Fiscal Indicators TABLE 4: Monetary Indicators

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without prior permission from the Government, except for permitted fair dealing under Copyright Order 2000. © Copyright 2005

1

ADVISORS

Yang Berhormat Pehin Orang Kaya Laila Setia Dato Paduka Haji Abdul Rahman bin Haji Ibrahim Minister of Finance II

Yang Mulia Pg. Dato Paduka Haji Maidin bin Pg. Haji Hashim Permanent Secretary Ministry of Finance

Yang Mulia Dato Paduka Awg. Haji Ali bin Apong Permanent Secretary Ministry of Finance

Yang Mulia Dato Paduka Awg. Haji Metassan bin Momin Permanent Secretary Ministry of Finance

Yang Mulia Awg. Haji Mohd Rozan bin Dato Paduka Haji Mohd Yunos Deputy Permanent Secretary Ministry of Finance

EDITORIAL BOARD MEMBERS

Accountant General, Treasury Department (TD) Director of Financial Institutions, Financial Institutions Division (FID)Director of Special Duties, Brunei International Financial Centre (BIFC)Director of Special Duties, Revenue Division (RD)Director of Budget, Expenditure Division (ED)Acting Chief Executive Officer, Brunei Currency and Monetary Board (BCMB)Acting Senior Administrative Officer, Research and International Division (RID)

FMR GROUP

HEAD

Awg. Haji Jefri bin Haji Md Salleh Special Duties Officer Research and International Division

SECRETARIAT

Hj Mohd Zaki Hj Hassanol As’shari (RID) Dk. Faadzilah Pg. DP Hj Abu Bakar (BIFC)

CONTRIBUTORS

Hj Jefri bin Hj Md Salleh (RID) P.A. Huda P.A. Hj Idris (BIFC)Dk. Sri Joedianna Pg. Hj Mohammed (BCMB)Ahmad Fathi Junaidi (BCMB)Dk. Sri Rohayani Pg. Matarsat (RD)Radhiah Yusof (FID)Carol Ong (BCMB)Rina Hayane Hj Sumardi (RD)Hjh Rafezah Hj Abd Rahman (FID)Ak. Liyan Pg. Hj Mohammad (RID)Dk. Faadzilah Pg. DP Hj Abu Bakar (BIFC)Ak. Shahrulazmi Pg. Dr. Hj Ismail (FID)Khatyrena Kifli (ED)Hj Mohd Zaki Hj Hassanol As’shari (RID)


EXECUTIVE SUMMARY Brunei Darussalam’s economy grew by an estimated 2.6 percent during Q1 2005 y-o-y but contracted by 0.9 percent q-o-q. The year-on-year growth in GDP is mainly attributed to the increased performance of various sub-sectors in the Non-Oil and Gas Sector. In Q1 2005, the Oil and Gas Sector contracted slightly by 0.6 percent (y-o-y) but grew by 1.4 percent (q-o-q). The Non-Oil and Gas Sector is estimated to grow by 6.0 percent (y-o-y), but declined by 2.0 percent (q-o-q). The year-on-year growth was mainly due to improvements in the Forestry; Construction; Wholesale & Retail; Restaurant & Hotels; and Transport & Communications Sectors. Inflation continued to be subdued with the Consumer Price Index increasing by 0.6 percent (q-o-q) and 1.5 percent (y-o-y).

As a result of the continuous rise in oil prices and a reduction in the value of total imports, Brunei Darussalam’s external trade surplus increased by 9.1 percent from the previous quarter and even more significantly by 26.8 percent year-on-year, reaching a total of B$1,860.5 million. Export earnings from the country’s oil and gas sector increased by 4 percent amounting to B$2,441 million. At the end of the quarter, international reserves stood at B$795.51 million, a 6.5 percent decrease from Q4 2004.

The fiscal position of the economy remained strong in Q1 2005, experiencing a surplus of B$74.1 million. Total Government Revenue decreased by 5.3 percent to B$1,637.3 million due to the decline of Tax Revenue collection of 9 percent. Total Government Expenditure rose by 16.7 percent mainly due to the increase of 41.3 percent in Other Charges Special Expenditure.

The US Dollar strengthened further to B$1.6593. Broad money fell by 0.9 percent (q-o-q) but expanded by 16.6 percent (y-o-y). Deposit rates for commercial banks have recorded higher rates compared to the whole of 2004. The overall indicators of the Banking Sector have shown a modest increase in Total Assets, Total Deposits & Total Loans of 27.6 percent, 22.2 percent and 1.9 percent respectively. Non-performing loans continues to decrease to 12.4 percent.

3

GLOBAL SHORT TERM ECONOMIC REVIEW

The U.S economy grew at 3.1 percent in Q1, the slowest in 2 years. Manufacturing sector lost 80,000 jobs, the 6th decline in the past 7 months, while the service industry rose 86,000, due to more jobs led by health care and business services. Unemployment rate fell to 5.2 percent. Retail sales rose only 0.3 percent in March from 0.5 percent in February, the first decline since the soft patch period of April 2004, as higher oil prices curbed consumers’ willingness to spend. Consumer Price Index (CPI) reflected increased pricing pressure when it jumped in March by 0.6 percent (m-o-m) or 3.1 percent (y-o-y), suggesting the Federal Reserve still has work to do to keep inflation from flaring. Responding to these pricing pressures, the Federal Open Market Committee (FOMC) raised their benchmark interest rate another 25 bps to 2.75 percent.

The European Central Bank left borrowing costs at a 6-decade low of 2 percent as record oil prices and unemployment threatened economic growth, while saying there are “no signs of underlying domestic inflation pressure building up”. Eurozone’s jobless rate rose to a 7-month high of 8.9 percent in March as the worsening outlook for growth discourages companies from hiring. Business and consumer confidence fell in March as record oil prices and rising unemployment in Germany weighted on economic growth.

The Bank of England left rates unchanged for an 8th

month with inflation being a primary concern. March data showed some pick-up in inflation, with CPI accelerating to 1.9 percent, and Producer Price Index (PPI) prices also rising. Unemployment rose slightly to 2.7 percent in March with manufacturing production fell unexpectedly by 0.5 percent in February, and the Confederation of British Industry’s (CBI) survey suggests this weakness will continue. On March 16th,the Chancellor presented a fiscally neutral Budget for fiscal year 2005-06 with mainly unvarying figures.

On a quarterly basis, the Japanese economy emerged to be thriving with data showing positive gains. The average level of real spending stands at 2.2 percent in Q1 following a -1.9 percent (q-o-q) fall in Q4. Industrial production rebounded to 1.7 percent (q-on-q) in Q1 having declined -5.4 percent in Q4. The trade surplus deteriorated in February due to a slowdown in exports growth and higher prices for import, especially oil and commodities. With net exports making a positive contribution to Q1 real GDP following a -0.1 percentage point contribution for the previous quarter, it has lay emphasis that Q1’s performance has been encouraging.

China’s economy expanded more than expected in Q1 with GDP growing by 9.5 percent as export and investment surged. Trade surplus for this quarter stands at US$16.6 billion, which a year earlier was a deficit of US$8.4 billion. China’s urban jobless rate was unchanged at 4.2 percent in Q1 as surging investment created millions of jobs for rural migrants, graduates entering the workforce and workers laid-off by state-owned enterprises. Inflation averaged 2.8 percent in Q1.

Crude Oil prices (US benchmark WTI) for the quarter averaged at US$46.45, US$47.60 and US$54.35 for January, February and March respectively. In March, OPEC announced it would increase its production quota by 500,000 b/d and was prepared to approve an additional 500,000-barrels increase should oil prices remain at its current levels.


REAL SECTOR DEVELOPMENTS

OVERVIEW

• In Q1 2005, real GDP grorr wthww was recorded at 6 2.6percent y-o-y.

• Oil and Gas Sector contracted by approximxx at y ely0.6 percent in Q1 2005 y-o-y.

• Non-Oil and Gas Sector expanded by 6.0 percrr t entin Q1 2005 y-o-y.-

• Averagvv e crude oil price per barrel wasww US$50. 3 43for Q1 2005.

• Average �NG price per ��tu�� waww s US$5.23 r forQ1 2005.

• Average �PI wasww 102.2 for Q1 2005.

Brunei Darussalam’s economy grew by an estimated 2.6 percent during Q1 2005 y-o-y but contracted by 0.9 percent q-o-q. The year-on-year growth was buoyed mainly by the expansion of various Non-Oil and Gas sectors. This has been the prevailing trend during recent quarters as portrayed in Figure 3.2

Figure 3.1: GDP at Constant Prices

3.0

3.8

1.7

3.6

2.8

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2001 2002 2003 2004 2005 (f)

eta

R ht

wor

G %

Source: Economic Planning and Development Department, Prime Minister’s Office (f)- Forecasted

Figure 3.2: Quarterly GDP at Constant prices Y-o-Y

-5.4

2.6

1.7 2.0

-1.1

2.6 2.81.7

-0.6-0.7

00.7

-0.7 -0.66

00.7

6.0

4.6

6.6

4.663.9

3.77

55.1

-6

-4

-2

0

2

4

6

8

Q333-0003 Q4-03 Q11--0004 QQ22-0044 QQ3-04 QQ4444-00044 QQ111-005

eta

R ht

wor

G %

Total GDP Growth

Oil Sector Growth

Non-Oil Sector Growth

Source: Economic Planning and Development Department, Prime Minister’s Office

OIL AND GAS SECTOR

The Oil and Gas Sector contracted slightly by 0.6 percent compared to production registered during the same period a year ago, but grew by 1.4 percent relative to production in Q4 2004. Average weighted oil production declined from 207,323 bpd in Q1 2004 to 206,142 bpd in Q1 2005 (a reduction of 0.6 percent). Average weighted LNG production also declined from 1,085,249.50 MMbtu per day in Q1 2004 to 1,077,353 (a reduction of 0.7 percent).

The price of crude oil1 averaged at US$50.43 per barrel in Q1 2005, an increase of 29.4 percent and 7.5 percent compared to the average price recorded for Q1 2004 (US$35.59) and Q4 2004 (US$46.66) respectively. Correspondingly, the price of LNG averaged at US$5.23 per MMBtu, an increase of 10.7 percent and 0.2 percent compared to the average price recorded for Q1 2004 (US$4.67) and Q4 2004 (US$5.22) respectively. These increases are in line with the general trend of surging world energy prices as a result of supply constraints on production coupled with ever-increasing demand.

Figure 3.3: Crude Oil Production and Prices

198,000

199,000

200,000

201,000

202,000

203,000

204,000

205,000

206,000

207,000

208,000

209,000

Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005

em

ulo

V

0.00

10.00

20.00

30.00

40.00

50.00

60.00

$S

U

Oil ( barrels per day, bpdCrude Oil (US$/barrel

Source: Petroleum Unit, Prime Minister’s Office

Table 3.1: Comparison of Crude Oil Production and Prices

Q42003

Q12004

Q22004

Q32004

Q42004

Q12005

Oil Production (bpd)

208,063 207,323 201,738 205,935 207,978 206,142

Avg Oil Price (US$/barrel)

32.00 35.59 38.20 46.31 46.66 50.43


1 Weighted Average Export Prices

Prices

5

Table 3.2: Comparison of LNG Production and Prices

Q4 2003

Q1 2004

Q2 2004

Q3 2004

Q4 2004

Q1 2005

LNG Production (‘000 MMBtu per day)

1,031 1,085 951 1,019 1,009 1,077

Avg LNG Price (US$/MMBtu)

4.49 4.67 4.70 5.01 5.22 5.23


Figure 3.4: LNG Production and Prices


NON-OIL AND GAS SECTOR

The Non-Oil and Gas Sector continued to grow in Q1 2005 recording a growth of 6.0 percent relative to Q1 2004. This was mainly due to expansions in the Forestry (12.3 percent); Construction (10.0 percent); Wholesale & Retail (21.1 percent); Restaurant & Hotels (1.5 percent); and Transport & Communications Sectors (13.7 percent). However, compared to Q4 2004, the Non-Oil and Gas sector registered a contraction of 2.0 percent.

The Agricultural Sector contracted by 7.8 percent y-o-y and 18.1 percent q-o-q. The year-on-year decline was a result of the decrease in production of vegetables (-9.6 percent); ornamental horticulture (-9.4 percent); various plantations (-13.5 percent); buffaloes (-18.2 percent); cattle (-78.1 percent); goats (50.0 percent); broiler chicken (-7.0 percent); chicken eggs (-15.6 percent); and fresh milk (-21.5 percent).

The Non-Oil Mining, Quarrying and Manufacturing Sector declined by 11.4 percent in Q1 2005 compared to Q1 2004. This was mainly attributed to the decline of the garment industry in Brunei Darussalam - which contracted by 16 percent - as a result of the expiration of the Multi-Fibre Agreement (MFA). The textile and garment industry was the second largest contributor to export earnings after oil and gas for Brunei Darussalam in recent years. It was reported that total

number of companies involved in the production of garments fell drastically from 21 at the end of 2004 to 7 at the end of Q1 2005.

The Banking and Finance Sector declined by 5.7 percent in Q1 2005 compared to the same period last year. However, relative to Q4 2004, the sector grew by 1.6 percent. Meanwhile, the Insurance Sector posted growth of 3.9 percent y-o-y, but contracted 30.7 percent q-o-q.

The Transport and Communication Sector continued to expand by an estimated 13.7 percent y-o-y and 5.9 percent q-o-q. The improved year-on-year growth of this sector was caused by the increase in volume of cargo handled (24.8 percent); and increased activity in the communications sub-sector.

INFLATION

For Q1 2005, the average CPI was 102.2, an increase of 0.6 percent and 1.5 percent from the CPI recorded for Q4 2004 and Q1 2004 respectively. The year-on-year increase was attributed to minor changes in the prices of significantly weighted commodity groups: Food & Non Alcoholic Beverages (+1.3 percent); Housing, Water, Electricity & Maintenance (+0.8 percent); Household Goods, Services & Operations (-1.9 percent); Transport (+2.8 percent); and Recreation & Entertainment (+12.4 percent) as depicted in Table 3.3 below.

Table 3.3: Consumer Price Index Q1 2005

Commodity Group

Weight Change

y-o-y (%) Change

q-o-q (%)

TOTAL 10,000 1.5 0.6

Food & Non-Alcoholic Beverages

2,877 1.3 -0.1

Clothing & Footwear

561 -4.1 1.1

Housing, Water, Electricity & Maintenance

884 0.8 0.1

Household Goods, Services & Operations

860 -1.9 1.0

Transport 2,251 2.8 0.7

Communication 548 -3.5 -0.7

Education 471 -1.5 0.1

Medical & Health

98 1.5 1.0

Recreation & Entertainment

814 12.4 3.0

Miscellaneous Goods & Services

636 -0.2 0.6


850

900

950

1,000

1,050

1,100

Q4

2003

Q1

2004

Q2

2004

Q3

2004

Q4

2004

Q1

2005

4.00

4.20

4.40

4.60

4.80

5.00

5.20

5.40

US$

Gas ('000 MMBtu/Day)

Gas (US$/MMBtu)

Volume


Figure 3.5: Consumer Price Index2

100.9

101.7 102.0

102.4

102.4102.4

100.8

100.1

101.3 101.3

101.2

100.6

101.2

101.1

101.5

98.5

99

99.5

100

100.5

101

101.5

102

102.5

103

Jan-04 Fe

b aM

rApr ya

M Jun uJ

l guA Sept cO

tNov eD

c 50-naJ

beF ra

M

xed

nI


OUTLOOK FOR THE REST OF 2005

The economy of Brunei Darussalam is forecastedto grow at a rate of 3.6 percent in 2005 , higher thanthe 1.7 percent growth achieved last year. With the completion of the maintenance and upgrading of oil production facilities, robust growth is anticipated from the oil and gas sectors. Meanwhile, further expansions areforeseen in the Non-Oil and Gas Sector.

The Asian Development Bank (ADB) predicts East Asia’s 2005 average GDP growth at 6.8 percent, about 0.8 percentage point lower than last year4. Within this broad pattern, however, countries such as Indonesia, Lao PDR, and Vietnam are expected to post higher growth this year than last year, while other countries are forecasted to slow in varying degrees. Despite the slowdown, six out of the twelve East Asian economies are forecasted to post GDP growth of 5 percent and above. Among these, the People’s Republic of China will continue to be the fastest growing economy with a GDP growth close 9 percent.

Economic growth experienced by Brunei Darussalam’s major trading partners namely ASEAN, Australia, China, India, Japan, New Zealand, South Korea and the USA will sustain market demand for its oil and LNG exports. The positive effects of increased export revenue due to favourable oil and LNG prices will further add to the growth of Brunei Darussalam’s economy.

Although Brunei Darussalam is a net exporter of crude oil and LNG, the continued high energy prices may pose a risk to Brunei Darussalam’s economy via the secondary impact or second round effect of a slowdown in the country’s major trading partners and also higher prices of imports. This effect will trickle

2 The Base year for CPI is 2002 (2002=100)

Economic Planning and Development Department, Prime Minister’s Office4

3

East Asia includes Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, PR China, Philippines, Republic of Korea, Singapore, Taiwan, Thailand, Vietnam

through affecting the balance of trade and also consumer prices.

The Non-Oil Private Sector is expected to post further growth during 2005 as this sector has continuously expanded in previous quarters. The year 2005 is the fifth and final year of the 8th National Development Plan, thus increased expenditure is expected due to the implementation, finalisation and completion of projects under the five year plan. This fiscal stimulus from increased government expenditure is expected to contribute to expansions in the various sectors of the economy mostly those involved in Construction; Transport & Communication; Wholesale; and Retail sectors. Other sectors such as Business Services; Banking, Finance and Insurance; and also Primary Industries are also expected to contribute to growth. The CPI has remained subdued during 2004 and it is anticipated that the trend will continue through 2005.

EXTERNAL SECTOR DEVELOPMENTS

OVERVIEW

• Total expxx orts inii creased by 3 percent to B$2,3 81million in Q1 2005.

• Total imports decreased by 13.8 percent otoB$520.4 million.

• A trade surplus of B$1,860.5 million waww ssrecorded.

• International Reserves decreased by 6.5 perce t ntto B$795.51 million.

Figure 4.1: Exports and Imports, Q1 2004 – Q12005

0

500

1000

1500

2000

2500

3000

Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005

no ill i

m $B

Trade Balance Oil & Gas Exports Imports Exports


7

Table 4.1: Export and Imports, Q1 2004-Q1 2005

Q12004

Q22004

Q32004

Q42004

Q12005

Exports 2,031 2,051 2,302 2,310 2,381

Imports 735 605 639 604 520

Oil & GasExports

1,829 1,746 2,098 2,154 2,241

TradeBalance

1,296 1,478 1,696 1,706 1,861


EXPORTS

Brunei’s exports continued to report robust growth in Q1 2005, showing a year-on-year increase of 17.2 percent. On a quarterly basis, export value rose 3 percent from B$2,310 million in Q4 2004 to B$2,381 million in Q1 2005. This increase is due to oil and gas exports increasing by 4 percent to B$2,241 million.

Petroleum and LNG exports recorded increases of 2 percent and 7.7 percent respectively, standing at B$1,425.6 million and B$813.9 million. Both of which are attributable to the continued upward spiralling of international oil and gas prices during the period.

Non-Oil and Gas exports, at B$140.3 million, showed a decrease of 9.7 percent from the previous quarter. This was primarily due to the considerable drop in garments exports, decreasing by 25 percent to B$38.8 million.

This, coupled with further decreases in exports of Beverages and Tobacco, Crude Materials Inedible and Miscellaneous Manufactured Articles, offset improvements in exports of Food, Chemicals, Manufactured Goods and Miscellaneous Transactions.

Table 4.2: Exports in B$ millions by Major Commodities

2004 Q1 2005%

Change

Oil and Gas 2,154.53 2,240.57 4.0%

Petroleum 1,398.67 1,426.59 2.0%

LNG 755.71 813.92 7.7%

Non-Oil and Gas 155.45 140.31 -9.7%

Garments 51.7 38.83 -25.0%

TOTAL 2,309.88 2,380.88 3.1%


Table 4.3: Comparison of Oil and Gas Average Prices

Q4 2004 Q1 2005 % change

Crude Oil(US$/barrel)

US$46.70 US$50.43 8.0%

Gas(US$/MMBtu)

US$5.10 US$5.21 2.4%


DIRECTION OF EXPORTS

Japan maintains its position as Brunei’s main importer, absorbing 41 percent of Brunei’s exports, followed by ASEAN with 22 percent and Korea with 14 percent. Exports to these regions show increases both on yearly and quarterly basis. Demand from India, however, has slowed down indicated by a decrease in exports by 80 percent to B$47.8 million from B$242.5 million in the previous quarter.

On a year-on-year basis, crude petroleum exports to our three main commercial partners increased. Crude petroleum exports to Australia, Korea and Japan rose by 26.9 percent, 201.1 percent and 23 percent standing at B$272.53 million, B$246.21 million and B$218.78 million respectively. On a quarterly basis, crude petroleum exports to Australia decreased by 11.2 percent while exports of the commodity to Korea and Japan increased by 6 percent and 29.5 percent respectively.

LNG export to Japan showed positive growth increasing by 23.5 percent (y-o-y) and 8.5 percent (q-o-q) to B$735.4 million. LNG export to Korea stood at B$78.51 million, showing a substantial contraction of 48.5 percent y-o-y.

Figure 4.2: Exports by Region of Destination90.

52

31.4

32

73.9

41

57.45

548.4

93

48.8

32.

748

71. 0

13

11.9

6

33.9

7626.4

25

1.7

15 .4

59

27.4

23 33.

271

6.79

3

31.4

92

76.3

77

0

200

400

600

800

1000

1200

ASEAN EuropeanUnion

Japan Korea USA Others

noilli

m $

B

Q1 2004 Q4 2004 Q1 2005


Figure 4.3: Proportion of Exports by Destination


Japan41%

USA7%

Australia11%

Others5%

European Union0%

Korea14%

ASEAN22%

ASEANThailand

8%

Singapore 7%

Malaysia 6%

Indonesia 79%


Figure 4.4: Proportion of Oil & Gas Exports by Destination

Crude Petroleum

Japan15%

Korea17%

Thailand3%

Others40%

India3%

China3%

Australia19%

LNG

Japan90%

Korea10%


IMPORTS

The import sector, mainly driven by the dynamism of domestic demand and the greater availability of external resources, saw a decline in the first quarter of 2005. Total imports reached B$520.4 million, a 13.8 percent reduction compared to that in the final quarter of 2004. This was due to import value decreases in Miscellaneous Manufactured Articles by 30.3 percent, Beverages & Tobacco by 22.3 percent and Manufactured Goods by 20.1 percent, as shown in Table 4.4. On the other hand, commodities such as Mineral Fuels, Chemicals and Animal & Vegetable Oils and Fats recorded increases in import value by 33.7 percent, 4.9 percent and 7.1 percent respectively.

On a year-on-year basis, despite the increases in imports of Mineral Fuels (53.4 percent), Beverages & Tobacco (29.1 percent) and Chemicals (21.8 percent), total imports declined by 29.3 percent. These increases in commodity imports were balanced out by the decreases in Miscellaneous Transactions by 18.4 percent, Crude Material Inedible by 18.7 percent and, most importantly, Machinery & Transport Equipments by 52.3 percent.

Figure 4.5: Composition of Total Imports, 2004

Food15%

Manufactured goods23%

Machinery & transport

equipments37%

Miscellaneous transactions

0%

Miscellaneous manufactured

articles10%

Chemicals9%

Beverages & tobacco

3%Crude material

inedible1%

Mineral fuels1%

Animal & vegetable oils and fats

1%


As shown in Figure 4.5 above, Machinery & Transport Equipments continue to hold the largest share of total imports, which amounted to 37 percent, an increase compared to i t s 34 percent share in Q4 2004. Therefore, the 52.3 percent decrease (y-o-y) in imports of Machinery & Transport Equipments, which reflected B$207.8 million, had a great impact on the value of total imports.

Table 4.4: Imports by Commodity

Q42004

Q12005

(q-o-q)change

Food 93.77 79.42 -15.30%

Beverages & tobacco 19.63 15.26 -22.30%

Crude material inedible 4.42 3.62 -18.06%

Mineral fuels 4.73 6.32 33.72%

Animal & vegetable oils and fats

2.62 2.75 4.91%

Chemicals 45.77 49.00 7.06%

Manufactured goods 148.16 118.35 -20.12%

Machinery & transport equipments

205.35 189.68 -7.63%

Miscellaneous manufactured articles

77.04 53.67 -30.34%

Miscellaneous transactions 2.57 2.34 -8.85%

Total imports 604.06 520.41 -13.85%


Malaysia, Singapore, USA and Japan remain as Brunei Darussalam’s principal sources of imports. In this quarter, 50 percent of the country’s total imports came from ASEAN countries (B$254.7 mill ion) of which 45 percent and 40 percent were dominated by Malaysia and Singapore respectively. As shown in Figure 4.6, the European Union accounted for 11 percent (B$58.1 million) of total imports while USA (B$52.1 million) and Japan (B$48.7 million) accounted for 10 percent and 9 percent respectively.

Imports of Machinery & Transport Equipments from Germany declined substantially by 67.1 percent from B$33.3 mil l ion in the previous quarter. This was followed by Republic of Korea by 27.3 percent and Japan by 19.3 percent.

Figure 4.6: Major Sources of Imports

Others20%

ASEAN50%

Japan9%

European Union11%

USA10%

Indonesia4%

Singapore40%

Thailand10%

Others1%

Malaysia45%

ASEAN


9

TRADE BALANCE

The economy’s total trade in Q1 2005 amounted to B$2,901.3 million, a 0.4 percent decrease compared to the final quarter of 2004 but an 11.7 percent rise year-on-year.

Balance of trade surplus in the country continued to increase reaching a 9.1 percent rise from an amount of B$1,705.8 million in Q4 2004 to B$1,860.5 million this quarter. On a year-on-year basis, trade surplus increased significantly by 26.8 percent. Such an increase is a result of higher nominal value of exports due to the continuous rise in oil prices.

INTERNATIONAL RESERVES

The economy’s international reserves decreased by 6.5 percent reaching a total of B$795.51 million from B$851.2 million in Q4 2004. Foreign exchange coverage of currency in circulation in this first quarter of the year came to 92.6 percent.

EXCHANGE RATE

The Brunei dollar weakened in the first quarter of 2005, as the US dollar rebounded, reaching B$1.6498 to the US dollar at the end of March. This depreciation stemmed from the concern that investors are taking funds out of Asia as they speculate that interest rates in the US and yields on US dollar-denominated assets will rise.

Figure 4.7: Exchange rate B$/US$

1.76561.7567

1.7284

1.7008

1.679

1.7163

1.6908

1.6338

1.6498

1.55

1.6

1.65

1.7

1.75

1.8

Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005

$S

U r ep $

B

Source: Various editions of International Financial Statistics (IMF)

FISCAL SECTOR DEVELOPMENTS

OVERVIEW

• In Q1 2005, Government Revenue declined by 5.3 percent to B$1,637.3 million from the previous quarter.

• In Q1 2005, Government Expenditure amounted to $1,563.2 million, an increase of 16.7 percent of the previous quarter.

FISCAL POSITION

Brunei Darussalam continued to enjoy a healthy fiscal surplus of $74.1 million. This surplus is equivalent to 4.7 percent of Total Government Expenditure.

Figure 5.1: Surplus/Deficit Balances

(600.0)

(400.0)

(200.0)

0.0

200.0

400.0

600.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2002 2003 2004 2005

noilli

m $B

Source: Treasury Department, Ministry of Finance

GOVERNMENT REVENUE

In Q1 2005, Total Government Revenue decreased by 5.3 percent to B$1,637.3 million from B$1,729.0 in the previous quarter. Of that amount, 57.2 percent was derived from Tax Revenue while the remaining 42.8 percent was from Non-Tax Revenue.

Figure 5.2: Fiscal Revenue, 2003 – Q1 2005

9.71 7

7.0 46

0 .0 85

3. 266

7.428

7.3 47

9. 75 9

5. 820, 1

0 .6 39

4 .9 06

7 .48 5

2.0 45

2.416

3.3 75

8.456

4.846

5.007

3.107

0.0

500.0

1,000.0

1,500.0

2,000.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2003 2004 (Prov.) 2005(Prov.)

noil li

m $B

Tax Revenue Non-Tax Revenue


Tax Revenue declined by 9.0 percent from B$1,028.5 million in Q4 2004 to B$936.0 million. Both the Oil Sector and the Non-Oil Sector decreased by 8.8 percent and 14.9 percent respectively.

Non-Tax Revenue stood at B$701.3 million, a very slight increase of B$0.8 million from the previous quarter, of which B$609.8 million came from the Oil Sector. In the Non-Oil Sector of Non-Tax Revenue, collection of revenue from Administrative Fees and Charges improved by 6.5 percent mainly due to the


higher collection of Telecoms & Utilities of 10.1 percent higher than the previous year.

On a y-o-y basis, Total Government Revenue increased by B$239.3 million from B$1,398.0 million. Both Tax and Non-Tax Revenue contributes to this increased amount. Oil Sector of Tax Revenue improved by 19.6 percent from B$758.4 million to B$ 906.8 million. However, the Non-Oil Sector of Tax Revenue declined from B$66.3 million to B$29.2 million.

Non-Tax Revenue increased from B$573.3 million in the previous year to B$701.3 million. This is mainly due to the rise of collection in both the Oil Sector and the Non-Oil Sector. The Oil Sector of Non-Tax Revenue improved by 26.5 percent from B$482.1 million to B$609.8 million. The Non-Oil Sector of Non-Tax Revenue remains the same.

Table 5.1: Budgeted & Actual Revenue Collection Comparison

BudgetedRevenue

for Q1 2005 (Jan – Mar) (B$ Million)

Actual Revenue

for Q1 2005 (Jan – Mar) (B$ Million)

Percentage of Revenue Collected

Total Revenue 984.6 1,637.3 66.3

Tax Revenue 566.6 936.0 65.2

Non-Tax Revenue 418.0 701.3 67.8

Source: Ministry of Finance

For the period January to March 2005, the total revenue collected is B$1,637.3 million which is 66.3 percent higher than the budgeted amount for the period. Both Tax and Non-Tax Revenue have shown higher returns with Non-Tax Revenue the highest returns.

GOVERNMENT EXPENDITURE

In Q1 2005, Government Expenditure which consists of Current Expenditure5, Capital Expenditure6 and Investment in Public Enterprises increased by 16.7 percent compared to the previous quarter. As can be seen from Figure 5.3 below, the Government Expenditure increased to B$1,563.2 million compared to B$1,339.8 million in Q4 2004. This increase was mainly due to the increase in Ordinary Charged Specia l Expendi ture (OCSE) by 41.3 percent compared to the pervious quarter. In comparison with the budgeted Government Expenditure of B$4,990.4 million allocated for the financial year 2004/05, 30.8

5 Current Expenditure is made up of 3 types of expenditure: (i) Personal Emoluments; (ii) Other Charges Annually Recurrent (OCAR), which is allocated for the

operations and maintenance of government agencies; and (iii) Charged Expenditure, which are those expenses that have to be borne

according to the Brunei Constitution. 6 Capital Expenditure comprises of 2 types:

(i) Ordinary Charged Special Expenditure (OCSE), which is used for one-off projects or payments, and

(ii) Development Expenditure, which is allocated for the projects under the Eighth National Development Plan.

percent were utilised for the period Q1 2005 (or Q4 2004/05).

Figure 5.3: Government Expenditure, Q1 2002 – Q1 2005

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2002 2003 2004 2005

noilli

m $B

Total Expenditure Current Expenditure

Capital Expenditure Investments in Public Enterprises


Current Expenditure

The spending of Current Expenditure, which amounted at B$1,242.0 million, has increased by 10.3 percent compared to B$1,126.1 million in Q4 2004. However, compared to Q1 2004, the Current Expenditure showed an increase of only 3.3 percent attributed to the decline in Other Charges Annually Recurrent (OCAR) by 5.7 percent i.e. from B$465.6 million in Q1 2004 to $439.0 mil l ion in Q1 2005. In terms of composition of Current Expenditure, OCAR shows a higher proportion of 35.3 percent followed by Wages and Salaries (35.2 percent) and Charged Expenditure (29.5 per cent).

Figure 5.4: Current Expenditure, Q1 2002 – Q1 2005

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2002 2003 2004 2005

no illi

m $B

Wages and salaries OCAR Charged


In Q1 2005, 36.6 percent of the allocated budget was utilised which amounted to B$1,242.6 million. 63.8 percent of the budgeted Charged Expenditure was utilised, while 29.0 percent and 33.6 per cent of the allocated budget were spent for Personal Emoluments and OCAR respectively.

(%)

11

Table 5.2: Budgeted & Actual Current Expenditure Comparison for Q1 2005

BudgetedExpenditure (B$ million)

Actual Expenditure (B$ million)

Percentage of Budget

Spent

Total 3,392.2 1,242.6 36.6

Personal Emoluments

1,507.8 437.1 29.0

OCAR 1,315.2 442.1 33.6

Charged 569.2 363.4 63.8


Capital Expenditure

In Q1 2005, Capital Expenditure amounted to B$296.1 million, an increase of 38.6 percent from B$213.7 million in Q4 2004. This is due to an increase in both OCSE and Development Expenditure by 41.3 percent and 34.1 percent respectively. On a year-on-year basis, the increase is only by 30.4 percent with OCSE and Development Expenditure increasing by 20.0 percent and 53.6 percent respectively. Out of B$900.0 million allocated for Development Expenditure, in Q1 2005 the Government has managed to spend B$108.7 million i.e. 12.1 percent.

Figure 5.5: Capital Expenditure, Q1 2002 – Q1 2005

0.0

50.0

100.0

150.0

200.0

250.0

noil li

m $B

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2002 2003 2004 2005

OCSE Development


Table 5.3: Budgeted & Actual Capital Expenditure Comparison

BudgetedCapital Exp (B$ million)

Actual Capital Exp For Q1 2005 (B$ million)

Percentage of Budget

Spent

Capital 1,598.2 296.6 18.6

Development 900.0 108.7 12.1

OCSE 698.2 187.9 26.9


From Figure 5.6 below, the three largest recipients of Development Expenditure were Construction (23.8 percent), Transportation (18.3 percent) and Education & Human Resource Development (13.8 percent). A total of B$25.8 million was spent on the Construction sector especially on Public Buildings and National Housing.

In the Transportation sector, B$19.9 million was spent whereby a major portion ( 87.3 percent) was spent on roads. A total amount of B$15.0 million was spent on Education, especially in building new schools and refurbishing and renovation of existing schools.

Figure 5.6: Development Expenditure, Q1 2005

Others2.8%

Industry and Commerce

6.3%Education and Human

Resource Development

13.8%

Communication and

Broadcasting5.9%

Transport18.3%

Construction23.8%

Public Amenities13.5%

Health3.3%

Security and Public Defense

12.2%


MONETARY & BANKING SECTOR DEVELOPMENTS

OVERVIEW

• Broad money decreased by 0.9 percent. • Currency in circulation expanded by 8.7

percent.• Average Deposit Interest rates rose for all

periods.• Total assets and total deposits of banks

increased by 6.2 percent and 2.4 percent respectively.

• Total loans of banks decreased by 0.4 percent. • NPL ratio continues to decrease to 12.4

percent.

MONETARY DEVELOPMENTS

The US Dollar showed an upturn performance despite the ever widening U.S. current-account deficit, which has increased to US$195.1 billion in the first quarter of 2005 (preliminary) from US$188.4 billion (revised) in the fourth quarter of 2004. The US Federal Reserve continued to increase its Fed Funds Rate at a measured pace on 2 February 2005 and 22 March 2005 bringing it to 2.75% at the end of Q1.


Table 6.1: B$ per US$

Q4 2004 Q1 2005

B$ to 1 unit of Foreign Currency

US Dollar 1.6495 1.6593

Sterling Pound 3.1701 3.1295

Euro 2.2586 2.1629

Australian Dollar 1.2903 1.2958

B$ to 100 units of Foreign Currency

Hong Kong Dollar 21.53 21.60

Indonesian Rupiah 0.0221 0.0219

Japanese Yen 1.5930 1.5524

Philippine Peso 3.62 3.72

Thai Baht 4.39 4.40 Source: The Brunei Association of Banks

Figure 6.1: Monetary Developments

7661.50

9017.4

8938.28741.5

8445.17884.40

7603.77

7572.57

7328.86

3558.1

3651

3431.63387.1

3376.003240.30

3126.02

3159.03

3086.60

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2003 2004 2005

no illi

m $

B

Broad money, M2

Narrow Money, M1

Source: Financial Institutions Division & Brunei Currency and Monetary Board, Ministry of Finance

M07 increased by 4.9 percent q-o-q and 7.2 percent y-o-y. As at March 2005, the currency in circulation backed by external assets stood at 91.1 percent while the amount of liquid asset as part of currency in circulation is at 66.6 percent.

M18 rose by 2.6 percent q-o-q and 8.2 percent y-o-y. Despite a decrease in Quasi Money9 of 3.15 percent q-o-q, it increased by 23.4 percent y-o-y. Overall, Broad money, M210 fell by 0.9 percent q-o-q and however, it increased by 16.7 percent y-o-y.

Figure 6.2: Currency Back-up (Quarterly)

0

100

200

300

400

500

600

700

800

2000 2001 2002 2003 2004 Q1 2005

no illi

m $

B

External assets

Currency in circulation

Min. external asset coverage

Source: Brunei Currency and Monetary Board, Ministry of Finance

7 M0 = Currency in circulation 8 M1= Currency in circulation + Demand Deposit of Private Sector 9 Quasi Money = Fixed Deposits + Savings and other deposits

10 M2= M1+ Quasi Money

Figure 6.3: Broad Money – Assets Side

3,421.73,286.2 3,096.7 3,118.4

2,773.13,095.0 2,914.4

2,312.91,928.2

5649.6

7947.18278.5

5314.9

5897.5 6132.6 6169.16512.6

7019.6

0

2,000

4,000

6,000

8,000

10,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2003 2004 2005

noilli

m $

B

Net domestic assetsNet foreign assets


On the assets side of broad money, Net foreign assets11 increased to B$8,278.5 million, a rise of 4.2 percent q-o-q and 34.2 percent y-o-y. The rapid expansion of Net foreign assets was attributed to a significant increase in commercial banks’ foreign assets. On the other hand, Net domestic assets declined by 16.6 percent q-o-q and 30.5 percent y-o-y as government deposits continued to increase. Claims on private sector fell by 0.1 percent q-o-q but expanded by 3.9 percent y-o-y.

Figure 6.4: Broad Money – Liabilities Side

589.3602.8

567.8565.6567.8554.8558.7560.0565.1

3061.7

2955.3

2863.8

2821.5

2808.2

2685.5

2567.4

2599.1

2521.5

5287.2

5459.35309.95058.0

4285.54644.1

4477.84413.5

4242.3

0

1,000

2,000

3,000

4,000

5,000

6,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2003 2004 2005

no illi

m $

B

Currency outside banks

Transferable deposits

Quasi-Money


As for the liability side of broad money, Quasi money which mainly consist of fixed deposits and savings, fell by 3.2 percent q-o-q but it expanded by 23.4 percent y-o-y. The Transferable deposits with a total of B$3,061.7 million, experienced an increase of 3.6 percent q-o-q and 9.0 percent y-o-y. Currency outside banks fell by 2.2 percent q-o-q but it expanded by 3.8 percent y-o-y.

11 Net foreign assets = BCMB foreign assets less foreign liabilities + Commercial banks foreign assets less foreign liabilities

13

Table 6.2: Brunei Deposit Rates

Months Q1 2003 Q1 2004 Q4 2004 Q1 2005

3 1.132 1.046 1.044 1.069

6 1.335 1.205 1.232 1.247

12 1.789 1.619 1.636 1.675


INTEREST RATES

Prime lending rate remained at 5.5 percent for the first quarter of the year. Deposit rates for commercial banks have recorded higher rates compared to the whole of 2004. Rates improved by 2-basis points on average for the 9 banks operating Banks in Brunei and this is reflected in the banking indicators.

BANKING SYSTEM

The overall indicators of the Banking Sector have shown a modest increase. On the basis of yearly comparison, Total Assets grew the highest by 27.6 percent, followed by Total Deposits and Total Loans at 22.2 percent and 1.9 percent respectively. On a quarterly basis, total assets grew by 6.2 percent to B$15,375.4 million; total deposits rose by 2.4 percent to B$10,903.9 million and total loans decreased slightly by 0.4 percent to B$4,611.7 million.

Figure 6.5: Total Assets, Total Deposits and Total Loans

15,375.414,471.4

13,538.112,902.5

12,047.9

10,889.411,483.8

11,444.411,960.9

10,903.910,652.1

9,746.2

9,180.7

8,921.5

8,422.18,620.2 9,012.68,679.0

4,611.7

4,527.0

4,586.0 4,630.54,346.9

4,389.8

4,486.0

4,524.5

4,527.7

3,000

5,000

7,000

9,000

11,000

13,000

15,000

17,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2003 2004 2005

noi ll i

m $

B

Total Assets

Total Deposits

Total Loans

Source: Financial Institutions Division, Ministry of Finance

The risk-weighted capital ratio (RWCR) and core capital ratio (CCR)12 for three local banks at the end of Q4 was 18.0 percent and 14.2 percent respectively. This is well above the Basel minimum requirement.

12 RWCR and CCR are both calculated based on Total On and Off Balance sheet assets using Tier 1 + 2 and Tier 1 capital respectively.

STRUCTURE OF LENDING

Loans at end Q1 2005 decreased slightly to B$4,611.7 million compared to B$4,630.5 million at Q4 2004.

Table 6.3: Direction of Lending

Q12004

Q42004

Q12005

y-o-y q-o-q Direction of Lending

(in B$ million) % change

Agricultural 40.4 33.9 33.1 -18.2 -2.5

C&F Inst. 21.2 11.4 10.4 -50.9 -8.5

Manufacturing 90.1 113.3 149.1 65.5 31.6

Transportation 193.4 206.8 197.3 2.0 -4.6

Construction 439.4 486.0 463.8 5.5 -4.6

Gen Comm 465.1 499.7 466.4 0.3 -6.7

Prof Services 93.7 44.3 39.4 -57.9 -10.9

Mortgage 451.6 432.7 435.9 -3.5 0.7

Personal 2,732.6 2,802.5 2,816.4 3.1 0.5

Total Loans 4,527.7 4,630.5 4,611.7 1.9 -0.4 Source: Financial Institutions Division, Ministry of Finance

Figure 6.6: Direction of Lending in percent, Q1 2005

Direction of Lending as at 31 March 2005

Personal Loans61.1%

Agricultural0.7%

Manufacturing3.2%

Credit & Financial

Institutions0.2%

Construction10.1%

General Commerce

10.1%

Professonal Services

0.9%

Mortgage9.5%

Transportation4.3%


Personal loans remain the largest share of the loans portfolio at B$2,816.4 million and accounted for 61.1 percent of total loans. This is followed by lending to the General Commerce Sector and the Construction Sector, at B$466.4 million and B$464.8 million respectively.

Lending to the Manufacturing Sector saw the highest increase for the quarter at 31.6 percent compared to Q1 2004. However this was offset by decreases in all of the sectors except Mortgage and Personal Loans.


NON-PERFORMING LOANS

Non-performing loans stood at 12.4 percent compared to 12.9 percent in Q4 2004 and 13.2 percent in Q1 2004.

Figure 6.7: NPL percentage, Q1 2003 – Q1 2005

12.4%

12.9%13.1%13.1%

13.2%

13.8%

14.2%14.5%

13.7%

11%

12%

13%

14%

15%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2003 2004 2005

)tn

ecr

ep

ni( o it

aR

LP

N


MONEY REMITTANCE

In Q1 2005 total money remitted recorded was B$147.7 million, a 57.5 percent increase from the end of 2004. Money remitted to the Philippines increased by 110 percent amounting to B$54.9 million; representing a market share of 37.2 percent. This increasing trend is due to the popular SMART Padala ,the world’s first international cash remittance service through text which makes use of the SMART money electronic wallet linked and managed through the mobile phone. Due to the major business link with Singapore, the amount remitted increased by 301.4 percent amounting to B$35.2 million. Indonesia remains one of the top destinations and amounted to B$31.1 million; Thailand with B$14.5 million; Malaysia with B$8.2 million; USA with B$0.05 million and other countries B$3.7 million as illustrated below.

Figure 6.8: Total Money Remitted, Q1 2004 – Q1 2005

9.5

2

4 .2

3

8.8

2.8

1 .5

1

2.6

2

9 .4

5

2.5

35

0.0

1.1

3

9 .0

1

9.2

1

7.1

1

5.4

1

8.8

0.3 30.

0

70.

0

7.0

6.2

7.3

0

10

20

30

40

50

60

Q1 Q4 Q1

2004 2004 2005

no ill i

m $

B

Indon M'siaP'pines ThailandS'pore USAOthers


FOREIGN CURRENCY EXCHANGE

The total amount of foreign currencies purchased during the period increased by 14.3 percent to B$20.7 million compared to the previous quarter. The Malaysian Ringgit was the highest purchased foreign currency at B$7.8 million followed by the Indonesian Rupiah at B$3.1 million. This was in anticipation of the high amount of Malaysian Ringgit required during the period of increased cross-border shopping in the run-up to the festive seasons such as Chinese New Year.

Figure 6.9: Buying of Foreign Currencies

9 .1

4.2

7.2

2.1

2.1 0.

19.

0

0.5

8.7

8.1

1.3

5 .0

5 .0

8.13.

1

7.1

9.1

1.0

3.0

3.01.

0

2.0 1 .

0

7.0

0.19.

06.0

7.6

5.3

7.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Q1 Q4 Q1

2004 2004 2005

noilli

m $

B

USD STG AUDMYR INDO RUPIAH PHIL PESO

THAI BAHT IND RUPEE SAUDI RIYALOTHERS


On the other hand, the amount of foreign currencies sold in the Q1 2005 was recorded at B$22.0 million. This was an increase of 20.2 percent compared to Q4 2004. All currencies, with the exception of Indonesian Rupiah and Saudi Riyal, increased during the period. The Malaysian Ringgit recorded the highest amount of foreign currency sold during the period and amounted to B$8.7 million in Q1 2005; an increase of 30.4 percent compared to Q4 2004. The Australian Dollar recorded the highest increase of 75.5 percent to B$1.5 million in Q1 2005 mostly due to the high number of Bruneian students departing to Australia for further studies.

Figure 6.10: Selling of Foreign Currencies

9.1

3.2

5 .2

2.1

2.1

4.1

6.0

8.0

5.1

0 .5

7.6

7.8

8.1

9.3

3.3

5.0

5.0

6.0

3.1

8.1

9 .1

1.0

3 .0

01.

0

12 .

0

80.

0

7.0

6.0

7 .1

3 .0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Q1 Q4 Q1

2004 2004 2005

o ill im $

Bn

USD STG AUDMYR INDO RUPIAH PHIL PESO

THAI BAHT IND RUPEE SAUDI RIYALOTHERS


15

TABLE 1: Brunei Darussalam - REAL SECTOR INDICATORS (Gross Domestic Product by sector)

Annual Data 1999 2000 2001 2002 2003 2004

(B$ million)

GDP at current prices 7,144.7 7,441.1 7,481.9 7,651.7 8,254.9 9,266.8

Oil sector 2,688.1 2,951.1 2,717.7 2,836.6 3,279.9 4,058.1

Non-oil sector 4,456.6 4,490.0 4,764.2 4,815.1 4,975.0 5,208.7

Government sector 1,783.6 1,803.6 1,855.5 1,929.8 1,936.5 2,029.5

Private sector 2,673.0 2,686.4 2,908.6 2,885.3 3,038.4 3,179.2

GDP at constant prices 4,031.4 4,145.2 4,271.6 4,392.3 4,559.7 4,638.4

Oil sector 2,150.9 2,230.5 2,264.0 2,336.4 2,420.5 2,385.2

Non-oil sector 1,880.3 1,914.7 2,007.7 2,055.9 2,139.2 2,253.2

Government sector 968.3 992.7 1,021.3 1,062.1 1,065.9 1,117.0

Private sector 912.0 922.0 986.4 993.8 1,073.3 1,087.0

Growth Rate (%)

GDP at current prices 9.3 4.1 0.5 2.3 7.6 12.3

Oil sector 25.7 9.8 (7.9) 4.4 15.6 23.7

Non-oil sector 1.4 0.7 6.1 1.1 2.9 5.1

Government sector 1.1 1.1 2.9 4.0 0.3 4.8

Private sector 1.6 0.5 8.3 (0.8) 4.7 5.0

GDP at constant prices 2.6 2.8 3.0 2.8 3.8 1.7

Oil sector 4.6 3.7 1.5 3.2 3.6 (1.5)

Non-oil sector 0.3 1.8 4.9 2.4 4.1 5.3

Government sector 1.4 2.5 2.9 4.0 0.4 4.8

Private sector (0.8) 1.1 7.0 0.8 8.0 5.9

GDP per capita at current prices (B$ Thousand) 22.5 22.9 22.5 22.5 23.6 25.9

Population (in Thousands)

Consumer Prices Index (Percentage Change)

316.5

(0.1)

324.8

1.2

332.8

0.6

340.8

(2.3)

348.8

0.3

357.8

0.9

Quarterly Data

Growth Rate Year-on-Year (%)

Q4-2003 Q1-2004 Q2-2004 Q2-2004 Q4-2004 Q1-2005

GDP at constant prices 1.7 2.0 (1.1) 2.6 2.8 2.6

Oil sector 0.7 (0.6) (5.4) 0.7 (0.7) (0.6)

Non-oil sector 3.7 5.1 3.9 4.6 6.6 6.0

Source: Economic Planning and Development Department, Prime Minister's Office


TABLE 2: Brunei Darussalam - EXTERNAL SECTOR INDICATORS

Q1 Q2 Q3 Q4 Q1

2003 2004 2004 2004 2004 2005

(B$ million)

Trade balance 1,528.5 1,466.8 1,477.7 1,696.1 1,705.8 1,860.5

Exports, f.o.b. 2,101.0 2,031.2 2,051.0 2,302.0 2,309.9 2,380.9

Imports, f.o.b. 572.5 564.4 573.3 605.9 604.1 520.4

Memorandum items

Average oil price (US$/Barrel) 32.00 35.59 38.20 46.31 46.66 50.43

International Reserves (B$ millions) 823.5 826.3 773.0 803.6 851.2 795.5

Import Coverage 1.4 1.5 1.3 1.3 1.4 1.5

Foreign exchange coverage of currency (%) 97.0 101.3 92.5 95.9 95.1 91.1

B$/US$ (end of period) 1.7008 1.6790 1.7163 1.6908 1.6338 1.6498

Source: Economic Planning and Development Department, Prime Minister’s Office; Brunei Currency and Monetary Board, Ministry of Finance

17

TABLE 3: Brunei Darussalam – FISCAL INDICATORS (Fiscal Position)

2003 2004 2005

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

(B$ million)

Total Revenue 1327.3 1225.3 1120.2 1276.5 1398.0 1398.5 1606.1 1728.5 1637.3

Tax Revenue 717.9 640.7 580.0 662.3 824.7 743.7 957.9 1028.5 936.0

Oil & Gas sector 685.4 560.5 524.9 622.2 758.4 643.2 894.7 994.2 906.8

Non-oil sector 32.6 80.2 55.1 40.1 66.3 100.5 63.3 34.3 29.2

Non-tax revenue 609.4 584.7 540.2 614.2 573.3 654.8 648.2 700.0 701.3

Oil & Gas sector 515.7 485.4 463.4 451.6 482.1 578.6 569.9 617.8 609.8

Non-oil sector 93.7 99.3 76.8 162.6 91.2 76.2 78.3 82.2 91.4

Total Expenditure 1105.9 986.0 985.4 1114.2 1429.5 912.5 1074.5 1339.8 1563.2

Current Expenditure 896.0 781.0 750.0 862.4 1202.5 782.1 852.0 1126.1 1242.0

Wages and salaries 402.3 316.1 316.8 318.5 422.8 326.8 328.1 328.1 437.2

OCAR 368.5 286.8 280.1 299.6 465.6 289.7 312.0 319.9 439.0

Charged 125.1 178.1 153.1 244.4 314.1 165.7 211.9 478.1 365.9

Capital Expenditure 209.9 186.9 235.4 246.5 227.0 130.4 222.5 213.7 296.1

OCSE 177.8 104.1 168.0 145.0 156.6 51.9 135.4 133.0 187.9

Development 32.1 82.9 67.4 101.5 70.4 78.5 87.1 80.7 108.2

Investments in Public Enterprises 0.0 18.0 0.0 5.3 0.0 0.0 0.0 0.0 25.0

Surplus or deficit (-), excl. transfer 221.4 239.4 134.8 162.3 -31.5 486.0 531.6 388.8 74.1

Memorandum items

Oil & gas sector revenues 1201.0 1045.9 988.4 1073.8 1240.5 1221.8 1464.6 1612.0 1516.6

Non-oil sector revenues 126.3 179.5 131.9 202.7 157.5 176.7 141.5 116.6 120.6

Oil & gas sector (in % of total revenues) 90.5 85.4 88.2 84.1 88.7 87.4 91.2 93.3 92.6

Non-oil sector revenues (in % of total revenues)

9.5 14.6 11.8 15.9 11.3 12.6 8.8 6.7 7.4 Source: Expenditure Division & Treasury Department, Ministry of Finance


TABLE 4: Brunei Darussalam – MONETARY SECTOR (Monetary Survey)

Q1 2004 Q4 2004 Q1 2005

B$ million

Net foreign assets 6,169.10 7,947.10 8,278.50 BCMB 826.10 850.80 815.60 Commercial banks 5,343.00 7,096.30 7,462.90 Assets 5,451.10 7,244.10 7,601.20 Liabilities 108.10 147.80 138.30

Claims on private sector 5,173.00 5,375.30 5,372.30

Claims on Government Net -2,690.30 -3,427.30 -3,820.80

Other assets 290.40 364.90 376.70 Commercial banks 242.60 283.00 298.10 Claims on Nonfinancial Public Corporations 47.80 81.90 78.60

Assets=liabilities 8,942.20 10,260.00 10,260.7

Money 3,376.00 3,558.10 3,651.00 Currency 567.80 602.80 589.30 Transferable deposits 2,808.20 2,955.30 3,061.70Quasi-money 4,285.50 5,459.30 5,287.20 Other deposits at commercial banks 4,285.50 5,459.30 5,287.20

Other liabilities 1,234.50 1,204.80 1,216.00

Memorandum items

Currency with banks 88.40 90.30 114.20

Broad money 7,661.50 9,017.40 8,938.20

Prime lending rate (end of period) 5.50 5.50 5.50

Net foreign assets - 13.21 4.17Claims on private sector - 1.08 -0.06Claims on Government Net - 24.58 11.48Money - 3.69 2.61 Currency - 6.16 -2.24 Transferable deposits 3.20 3.60Quasi-Money - 2.81 -3.15 Other deposits at commercial banks

- 2.81 -3.15

Contribution to broad money growth

Net foreign assets - 10.61 3.68 Claims on private sector - 0.66 -0.03 Claims on Government Net - -7.74 -4.36

Memorandum item (Percent change q-o-q)

Broad money - 3.16 -0.88 Source: Financial Institutions Division & Brunei Currency and Monetary Board, Ministry of Finance

Fiscal and Monetary Review - Annual 2004

1st Quarter

Ministry of FinanceCommonwealth DriveBandar Seri Begawan BB3910Negara Brunei Darussalam

October 2005

2005

fiscal & monetarybook · hj mohd zaki hj hassanol as’shari (rid) dk. faadzilah pg. dp hj abu...

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