Day: September 23, 2021

BANDAR SERI BEGAWAN– The Asian Development Bank (ADB) projected Brunei’s economic growth at 3.5 percent next year, compared to three percent predicted earlier.

The Asian Development Outlook (ADO) 2021 published yesterday, also stated that, Brunei’s economic growth is trimmed to 1.8 percent in the latest ADB update of its flagship economic publication, down from their earlier forecast of 2.5 percent in Apr, this year.

ADB, in its latest report, said Brunei’s growth in the first quarter (Q1) of 2021 contracted by 1.4 percent year-on-year, on declines in government consumption, investments, and exports that more than offset the growth in private consumption.

Exports of goods and services decreased by 4.3 percent by volume, primarily on plunging sales of mineral fuels. Government consumption fell by 9.8 percent, as measures to contain the COVID-19 outbreak affected some government services. Investment fell by 5.7 percent, with declines in both private and government capital spending.

The contraction in Q1 growth was mainly driven by lower oil and gas production (down 3.1 percent) and manufacturing of natural gas (down 11.4 percent). Services output recovered slightly. This was a broad recovery, however, spanning wholesale and retail trade, restaurants, business services, information and communication, as well as, real estate and personal services. The recovery in services is an indication that the effects of COVID-19 on the economy are receding.

Even so, output in several other sectors declined, particularly transport, government services, and hotels. Because of weaker-than-expected gross domestic product (GDP) growth in Q1, the update revises down its forecast for growth for the full year from the projection in ADO 2021.

The forecast for 2022 is higher, due largely to an expected rise in production and investment at Hengyi Industries’ refinery project, and in state-owned Brunei Fertiliser Industries’ ammonia and urea production plant. The inflation rate in the second quarter (Q2) was at 1.3 percent, lower than the peak of 2.5 percent in June, 2020.

All components of the consumer price index (CPI), except for transport and restaurants and hotels, rose at a softer pace. Inflation is expected to continue moderating in the near term, due to the large output gap. Although exports were slightly down in the first four months of this year, it recovered in May and June to post growth of 33.6 percent in the first half of 2021. They are expected to continue to rise over the rest of 2021.

ADB said, higher global oil and liquefied natural gas prices this year and next, compared with their levels in 2020, will support growth in goods exports. As exports pick up, imports will also rise – their value was up 169.8 percent from Jan to June – on the anticipated strengthening of domestic demand and inputs, such as mineral fuels for Hengyi’s refinery.

The net result of all this will be a lower current account surplus this year than was forecast in ADO 2021, but the surplus will still be higher than 2020’s.

Source: NAM NEWS NETWORK

MANILA, PHILIPPINES— The Asian Development Bank (ADB) has approved an $80 million policy-based lending program to support efforts to diversify the Kyrgyz Republic’s economy and make it more resilient to shocks such as the coronavirus disease (COVID-19) pandemic.

Under the second subprogram of the Promoting Economic Diversification Program (PEDP), ADB will provide a $69.3 million policy-based loan and a $10.7 million grant to help the economy transition from a heavy reliance on gold extraction and remittances to broad-based, sustainable, and inclusive growth.

The program supports the implementation of reforms that will enhance trade and investment competitiveness, promote the development of small and medium-sized enterprises (SMEs), improve infrastructure development through public–private partnerships (PPP), develop industry-based skills, and improve fiscal management and social protection resilience.

“As a long-standing partner of the Kyrgyz Republic, this program builds on a strong base of country knowledge, close collaboration, policy dialogue, and reform efforts,” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “We remain fully committed to supporting the Kyrgyz Republic as it continues to gradually diversify its economy.”

“Ultimately, staying the course on these reforms will strengthen the country’s capacity to increase exports and foreign direct investment, improve agricultural production and food security, create more decent jobs, and provide stable incomes through increased SME engagement in the formal economy,” added Mr. Zhukov. “The reforms will also increase investments in economic and social infrastructure and improve vocational education and skills training.”

“The Kyrgyz Republic has taken major steps towards improving the economy’s resilience to future shocks through comprehensive structural and institutional reforms,” said ADB Public Management Specialist Laisiasa Tora. “Even though it is urgent for economic policy to focus on stabilizing the current COVID-19-related health, macroeconomic, and social crises, the government also recognizes that for a small, open, and integrated economy, maintaining efforts to diversify its economy must remain its crucial reform priority.”

In 2019, ADB approved a $50 million grant for the first subprogram of PEDP which helped the government build the foundation for policy and institutional reforms in agriculture, trade and investment competitiveness, SME development, PPP development, and industry-linked skills development.

The Kyrgyz Republic joined ADB in 1994. Since then, the bank has committed more than $1.3 billion in loans, $811 million in grants, and $69 million in technical assistance projects. ADB operations in the country focus on supporting inclusive growth and economic diversification beyond the COVID-19 pandemic, improving access to public and social services, and leveraging regional cooperation and integration.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: Asian Development Bank