Washington, DC: On September 18, 2026, the Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Brunei Darussalam. [1] The authorities have consented to the publication of the Staff Report prepared for this consultation. [2]
Economic activity recovered modestly in 2025, with real GDP growth reaching 1 percent, as a recovery in upstream oil and gas (O&G) production offset continued softness in some non-hydrocarbon sectors. Inflation remained subdued, with prices declining by 0.3 percent in 2025 amid lower global food and commodity prices. The external position strengthened considerably, with the current account surplus increasing to 18.0 percent of GDP, supported by favorable terms of trade and improvements in the non-O&G trade balance. The fiscal deficit widened to an estimated 18.9 percent of GDP in FY2025/26, reflecting weaker hydrocarbon revenues and continued elevated spending. Financial conditions eased and the banking sector remained sound, supported by strong capital and liquidity buffers, low nonperforming loans, and a recovery in private sector credit growth.
The outlook remains favorable, supported by higher global energy and petrochemical prices and ongoing investment-led diversification. The recent rise in hydrocarbon prices is expected to strengthen export earnings, fiscal revenues and external balances in 2026, although the impact on real activity is moderated by limited increases in oil and gas production volumes. Real GDP growth is projected at 2.3 percent in 2026, driven mainly by the hydrocarbon sector, while inflation is expected to rise to 1.3 percent as higher global food and commodity prices pass through to domestic prices. The current account surplus is projected to widen further to 19.5 percent of GDP. The fiscal deficit is expected to narrow significantly in FY2026/27, supported by stronger hydrocarbon revenues and robust nominal GDP growth. Hydrocarbon price volatility remains the principal two-sided risk to the outlook. Heightened geopolitical tensions and disruptions to global trade, shipping routes, or hydrocarbon facilities could weaken growth and raise inflationary pressures, while stronger-than-expected hydrocarbon production, faster implementation of major investment projects, and more rapid diversification could support stronger economic performance.
Executive Board Assessment [3]
Executive Directors welcomed Brunei Darussalam's favorable outlook, supported by an expanding hydrocarbon sector, gradual economic diversification, substantial financial and external buffers, and a stable monetary framework. However, noting large persistent fiscal deficits and vulnerability to hydrocarbon price volatility, Directors emphasized the importance of continued prudent policies and steadfast reforms to sustain macroeconomic stability and support diversification, inclusive growth and employment.
Directors called for a well‑calibrated fiscal consolidation strategy, supported by a medium‑term fiscal framework and a non‑hydrocarbon fiscal anchor, to strengthen sustainability and intergenerational equity, reduce procyclicality, and help address aging pressures. They concurred that priorities include better‑targeting subsidies and containing public wages, while protecting priority development spending and vulnerable households, as well as mobilizing non‑hydrocarbon revenue. Directors noted the modest expenditure consolidation in the FY2026/27 budget and encouraged the authorities to maintain the budgeted envelope even with windfall revenues.
Directors noted that the external position is assessed to be substantially stronger than implied by fundamentals and desirable policies. They encouraged continued efforts to support private domestic demand, particularly by boosting private investment. This would also help to bring the external position closer to its norm. Continuing to improve the overall business climate will be essential to support private sector‑led investment. Directors agreed that the currency board arrangement with Singapore has served the country well and has been instrumental in anchoring macroeconomic and financial stability.
Directors welcomed the financial sector's strong capital and liquidity buffers and contained systemic risk. They encouraged the authorities to phase in the remaining Basel III components, mitigate vulnerabilities from concentrated corporate lending and bank and nonbank offshore exposures, and strengthen the AML/CFT/CPF framework before the next mutual evaluation.
Directors underscored that ambitious structural reforms remain essential to advance diversification, strengthen private sector dynamism, and broaden employment opportunities. They supported efforts to align upskilling and reskilling with industry needs, address skills mismatches, support MSMEs, and deepen linkages with FDI projects. They encouraged the authorities to rebalance labor market incentives, streamline permitting and licensing, and advance trade facilitation to support private sector‑led growth and investment.
Directors welcomed recent progress in improving data quality, and encouraged the authorities to continue addressing data shortcomings in national accounts, prices, external sector statistics, and fiscal data.
Brunei Darussalam: Selected Economic and Financial Indicators, 2023-31 |
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Area: 5,765 sq. kilometers Population (2024): 455,500 Nominal GDP per capita (2024): US$ 33,665 Main export destinations (2024): Australia (19%), China (18%) and Japan (14%) Unemployment rate (2024): 4.8% Labor force participation rate (2024): Total 64.1; Male 72.0; Female 55.1 |
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| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | |
| Proj. | Proj. | Proj. | Proj. | Proj. | Proj. | ||||
| Output and Prices | |||||||||
| Nominal GDP (millions of Brunei dollars) | 20,274 | 20,496 | 19,610 | 23,405 | 22,027 | 22,103 | 22,454 | 23,904 | 24,922 |
| Nominal non-oil and gas GDP (millions of Brunei dollars) | 10,878 | 11,073 | 10,788 | 11,628 | 12,093 | 13,072 | 14,054 | 14,989 | 15,682 |
| Real GDP (percentage change) | 1.1 | 4.1 | 1.0 | 2.3 | 1.3 | 2.7 | 2.2 | 6.5 | 4.2 |
| Oil and gas sector 1/ | -2.5 | 5.4 | 3.0 | 2.3 | -2.1 | -2.4 | -2.7 | 8.2 | 5.4 |
| Non-oil and gas sector | 4.5 | 2.9 | -0.8 | 2.4 | 4.4 | 7.1 | 6.0 | 5.1 | 3.3 |
| Downstream | -2.8 | 11.8 | -0.9 | 7.1 | 3.8 | 29.8 | 21.5 | 18.7 | 9.8 |
| Other | 5.6 | 1.7 | -0.8 | 1.7 | 4.5 | 3.5 | 3.0 | 2.0 | 1.5 |
| Oil production ('000 barrels/day) | 89 | 99 | 107 | 109 | 107 | 104 | 100 | 96 | 93 |
| Natural gas output (millions BTUs/day) | 677,954 | 701,617 | 693,945 | 714,764 | 700,468 | 686,459 | 672,730 | 753,874 | 812,610 |
| Average Brunei oil export price (U.S. dollars per barrel) | 87.1 | 83.8 | 72.3 | 92.6 | 81.6 | 78.6 | 75.7 | 73.5 | 71.6 |
| Average Brunei gas export price (U.S. dollars per million BTU) | 10.7 | 9.7 | 8.8 | 12.0 | 9.4 | 7.2 | 6.6 | 7.2 | 7.6 |
| Consumer prices (period average, percentage change) | 0.4 | -0.4 | -0.3 | 1.3 | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| Public Finances: Budgetary Central Government | (Fiscal Year, In percent of GDP) | ||||||||
| Total revenue | 18.2 | 17.2 | 13.6 | 15.8 | 15.0 | 14.6 | 14.2 | 14.2 | 14.2 |
| Oil and gas 1/ | 13.5 | 12.2 | 9.3 | 11.9 | 10.7 | 9.9 | 9.2 | 9.1 | 9.0 |
| Other | 4.8 | 5.0 | 4.3 | 3.9 | 4.3 | 4.7 | 5.0 | 5.1 | 5.2 |
| Total Expenditure | 30.1 | 30.5 | 32.5 | 27.7 | 29.7 | 30.0 | 29.9 | 28.4 | 27.5 |
| Current | 28.3 | 29.4 | 31.2 | 26.5 | 28.4 | 28.6 | 28.5 | 27.0 | 26.2 |
| Capital | 1.8 | 1.1 | 1.3 | 1.2 | 1.3 | 1.4 | 1.4 | 1.4 | 1.3 |
| Overall balance 2/ | -11.9 | -13.3 | -18.9 | -11.9 | -14.7 | -15.4 | -15.7 | -14.2 | -13.3 |
| Non-oil and Gas Balance (In percent of non-oil and gas GDP) | -42.9 | -42.7 | -47.2 | -42.8 | -42.2 | -39.4 | -36.7 | -34.2 | -32.5 |
| Money and Banking | (Year-on-year growth rate, in percent) | ||||||||
| Private Sector Credit | 3.9 | 3.0 | 2.5 | 2.6 | 0.7 | 0.3 | 1.6 | 6.5 | 4.3 |
| Narrow money | 0.7 | -0.9 | 1.8 | 3.1 | -0.1 | 2.2 | 0.8 | 4.0 | 6.7 |
| Broad money | 2.7 | 3.6 | 2.2 | 4.0 | -4.6 | 2.3 | 3.0 | 7.9 | 5.6 |
| Balance of Payments | (In millions of U.S. dollars, unless otherwise indicated) | ||||||||
| Goods | 3,798 | 3,709 | 4,014 | 4,815 | 3,747 | 3,457 | 3,519 | 3,923 | 4,377 |
| Exports | 11,233 | 11,073 | 10,293 | 12,270 | 11,062 | 11,822 | 13,036 | 14,813 | 16,101 |
| Of which: oil and gas 1/ | 4,351 | 4,474 | 4,087 | 5,274 | 4,405 | 3,731 | 3,417 | 3,556 | 3,728 |
| Imports | 7,435 | 7,364 | 6,279 | 7,455 | 7,315 | 8,366 | 9,517 | 10,890 | 11,723 |
| Services (net) | -1,302 | -1,337 | -1,076 | -1,191 | -1,255 | -1,307 | -1,325 | -1,312 | -1,300 |
| Primary Income (net) | 195 | 491 | 488 | 511 | 531 | 551 | 572 | 594 | 616 |
| Secondary Income (net) | -747 | -634 | -718 | -600 | -641 | -662 | -661 | -645 | -645 |
| Current Account Balance | 1,944 | 2,230 | 2,707 | 3,536 | 2,381 | 2,039 | 2,105 | 2,559 | 3,048 |
| Current Account Balance (in percent of GDP) | 12.9 | 14.5 | 18.0 | 19.5 | 13.9 | 11.9 | 12.1 | 13.8 | 15.8 |
| Gross Official Reserves 3/ | 4,483 | 4,414 | 5,489 | 5,944 | 6,142 | 6,567 | 7,165 | 8,094 | 8,206 |
| In months of next year's imports of goods and services | 5.9 | 6.8 | 7.2 | 7.9 | 7.3 | 7.0 | 6.8 | 7.2 | 7.3 |
| Brunei dollars per U.S. dollar (period average) | 1.34 | 1.34 | 1.31 | … | … | … | … | … | … |
| Brunei dollar per U.S. dollar (end of period) | 1.32 | 1.37 | 1.28 | … | … | … | … | … | … |
[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members. Brunei is on a 24-month cycle. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the www.imf.org/en/countries/brn page.
[3] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm .
