Brunei maintains low inflation rate

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A cashier putting up a drink purchased by a customer in one of the supermarkets in Brunei. Image: Ridhwan Kamarulzaman

BANDAR SERI BEGAWAN

Brunei’s inflation rate remained low despite Autoriti Monetari Brunei Darussalam (AMBD) recording an average rise of 0.2 percent in the cost of goods and services for the first ten months of 2018.

The central bank associated such rate to the increasing cost of food and beverages, books, stationeries, holiday and pilgrimage packages as well as fees for selected private schools.

AMBD in its latest bi-annual policy statement maintained its forecast that Brunei’s inflation rate will remain within the lower half of 0 to 1 percent, a trend which it said will likely to carry forward onto the next year.

But it also added that there will be potential downside risks to its forecast if global inflationary pressures remain weak.

Domestic inflationary pressure is expected to remain muted until the end of 2018 and will persist into next year due to a number of reasons.

Firstly, imported inflation is expected to remain soft as global commodity prices are likely to continue being weighed down by trade issues.

Secondly, Singapore’s currency growth will likely contribute to some deflationary effects to Brunei, given the longstanding one-to-one currency peg.

Thirdly, domestic inflationary pressures are likely to hold steady with the support of stable domestic demands.

The central bank also highlighted that local licensed financial institutions continued to have strong fundamentals underpinned by high levels of capitalisation, strong liquidity and improved profitability.

It issued a number of notices this year to enhance investor protection and confidence in the capital markets.

AMBD’s implementation of the national credit scoring system known as the Bureau Credit Score was also acknowledged by the World Bank recently, as outlined in the Doing Business Report 2019.

Additionally, Brunei had also achieved the full score and ranked first out of 190 economies in the Getting Credit indicator, sharing the top spot with New Zealand.

The Bruneian