Brunei's 2005 GDP 9.7% higher in national accounts: consultant

Prof Dr Joerg Beutel, senior research associate at DIW econ, presenting the key findings from Brunei's Input-Output Tables project during a seminar for stakeholders at the Indera Kayangan Ballroom of The Empire Hotel and Country Club, Jerudong. Picture: BT/Ubaidillah Masli

Wednesday, January 25, 2012

DEVIATIONS in Brunei's National Accounts have been found following the recent completion of the Sultanate's Input-Output Table (IOT), a comprehensive statistical tool that shows the economy's inter-industry relations from a "bird's eye view".

The IOT, which used data compiled from 2005 and was formulated with the aid of a German consultancy firm, has indicated that Gross Domestic Product (GDP) was larger in that year by 9.7 per cent, than as stated in the National Accounts.

"With this first assessment of IOTs, we have established a new, quite independent (measure) of GDP compared to the old system of national accounts. Hopefully in the future, we will integrate both systems. Our findings indicate that GDP in 2005 was larger than in the official numbers by 9.7 per cent," said Professor Dr Jorg Beutel, senior research associate at DIW econ GmbH.

The GDP recorded in the National Accounts was $15.86 billion compared to the $17.39 billion recorded in the IOT.

"Since GDP statistics compiled using the input-output system are generated from more detailed data sources, they are deemed to be more accurate," said Acting Director-General of Economic Planning and Development Dr Hjh May Fa'ezah Hj Ahmad Ariffin.

Professor Dr Beutel said that among the reasons that the GDP was higher was because the IOT, for the first time, reflected the Treasury Accounting and Finance Information systems, included Brunei's first assessment of government capital consumption, included a new estimate of owner-occupied housing, integrated Financial Intermediation Services as well as the first survey result for input-output systems on non-profit organisations in the Sultanate.

"So, we have a serious cause for a certain revision of our national accounts, a little bit higher but certainly not all," the professor of Economics and Environmental Sciences told a seminar of stakeholders of the IOT yesterday.

Breaking it down, Beutel said: "We can see that our estimate of private consumption is significantly higher (in the IOT) but the share of private consumption in total GDP is very low at 24.5 per cent. Germany, it's 55 per cent and America, which has been over-spending for a long time, was 65 per cent".

However, he assured that the estimate was similar to the economies of the Gulf Cooperation Council countries.

"We can do better. The country is rich enough to encourage more private consumption," he said.

In comparison, government consumption was relatively high (23.9 per cent of GDP). Beutel cited that in Switzerland, which he said was "well-administered", government consumption was in the range of 15 per cent.

"So 24 per cent, we could think of more prioritisation and scale this down a little bit," he said.

In terms of gross fixed capital formation, Beutel noted that although the figure was not far off from official statistics, the 2005 level ($1.847 billion) was still low.

"10.6 per cent (share of GDP) is much, much too low. In development planning, my alarm bells ring if the share of investment in GDP is below 20 per cent," he said.

"So, we must do something about it. Not only attracting foreign direct investment, we must do something in-house," he added.

The investment ration was also "critically" low, at 11.7 per cent of GDP, as well as the compensation of employees, which was 22.8 per cent of value added.

The net export of goods and services, on the other hand, was high at 39.5 per cent of GDP.

The Brunei Times

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