The government on Wednesday proposed a national budget of B$5.86 billion for the 2021-2022 Financial Year, the same as last fiscal year’s approved budget.
Speaking on the third day of the Legislative Council meeting, Minister at the Prime Minister’s Office and the Second Minister of Finance and Economy, Yang Berhormat Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah outlined the three main priorities of this year’s national budget.
Centering on the theme of building a more resilient socio-economic development, the budget for the 2021-2022 Financial Year will focus on increasing the country’s productivity, the provision of sustainable and resilient facilities and infrastructure for public welfare and economic development as well as producing competent and employable manpower.
About 34.4 per cent or $2.02 billion of the proposed budget will go towards the remuneration of about 65,281 civil servants, 37.3 per cent or $2.18 billion will go towards recurring expenses and 10.2 per cent or $600 million of the national budget will be used for development expenditures.
Additionally, the remaining budget of $1.06 billion will go towards accrued expenses.
The impact of COVID-19 and its effects towards global oil prices remain a challenge for the development of the country’s economy which is heavily dependent on the oil and gas sector, the minister said.
This is evident from last year, where at one point oil prices fell below US$20 per barrel, he continued, adding that in combination with a decline in the country’s hydrocarbon production, these factors have had an influence on the government’s ability to collect revenue and cover its expenditures.
According to YB Dato Dr Amin, despite government expenditure decreasing by 2.1 per cent to $5.87 billion during the 2019/2020 Financial Year compared to the 2018/2019 Financial Year, government revenue also fell by 19.6 per cent to $4.85 billion and as such the sultanate recorded a deficit of $1.03 billion during the 2019/2020 Financial Year.
For the 2020/2021 Financial Year, on the other hand, government revenue up until 28 February 2021 amounted to $1.46 billion, a decline of 57.7 per cent compared to the $3.45 billion acquired within the same period of the 2019/2020 Financial Year.
Meanwhile government expenditure up until 28 February 2021 amounted to $4.44 billion which is about 75.7 per cent of the approved budget of the 2020/2021 Financial Year.
Due to this, the fiscal positioning of the government in the 2020/2021 Financial Year, up until 28 February 2021 has recorded a deficit of $2.98 billion.
In regards to the country’s GDP performance in 2020, citing statistics from the Department of Economic Planning and Statistics (DEPS), the minister noted how the oil and gas sector recorded a decline of 4.9 per cent due to the decreased production in crude oil and natural gas.
Despite this, however, the country saw economic growth of about 1.2 per cent which is attributed to the progress made by the non-oil and gas sector which has experienced a growth of about nine per cent year-on-year.
The manufacturing subsector or the manufacturing of petroleum and chemical products in particular soared by 323.9 per cent while the communications subsector grew by 15.9 per cent.
The agriculture, forest and fisheries subsector, on the other hand, grew by 11.7 per cent due to increased production of farmed shrimp by the aquaculture industry as well as increased production in the cattle and broiler industry.
Meanwhile, the wholesale and retail trade subsector increased by 2.8 per cent due to the travel restrictions caused by the COVID-19 outbreak.
The global pandemic led to an increase in consumer demands for goods such as computer & telecommunication equipment, electrical appliances & lighting equipment and pharmaceutical and medical items, cosmetics & toiletries.
YB Dato Dr Amin went on to say that the DEPS has projected Brunei’s GDP growth to be between 0.8 to 1.6 per cent in 2021, with the oil and gas sector expected to grow at a rate of 0.5 per cent while the growth rate of the non-oil and gas sector is expected to be between 1.1 per cent to 2.9 per cent.
The minister then proceeded to outline the estimated government revenue for the 2021/2022 Financial Year which is projected to amount to $2.61 billion.
Revenue from the oil and gas sector is estimated at $1.52 billion while revenue from the non-oil and gas sector is estimated at $1.09 billion.
Based on these revenue estimates, the national fiscal position for the Financial Year 2021/2022 will experience a deficit of approximately $3.25 billion.
THE BRUNEIAN | BANDAR SERI BEGAWAN