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Answer to Oral Question PL232

QUESTION​

Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abd. Rahman bin Haji Ibrahim​

YANG BERHORMAT PEHIN ORANG KAYA LAILA SETIA DATO SERI SETIA AWANG HAJI ABD. RAHMAN BIN HAJI IBRAHIM asks MENTERI DI JABATAN PERDANA MENTERI DAN MENTERI KEWANGAN DAN EKONOMI II to state, clarification is sought regarding the JPES Report for Q1 2025 which recorded GDP growth of -1.8 per cent, where almost all non-oil sector growth was affected. What are the actual causes of this decline in growth and what are the strategic measures to maintain a positive growth trajectory?

ANSWER​

Yang Berhormat Menteri di Jabatan Perdana Menteri dan Menteri Kewangan dan Ekonomi II​

Thank you Yang Berhormat Yang Di-Pertua. Kaola would like to express appreciation for the question from Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abd. Rahman bin Haji Ibrahim.

Gross Domestic Product (GDP) in the first quarter (Q1) of 2025 declined by -1.8 per cent, mainly due to temporary disruptions, namely scheduled and unscheduled maintenance, which affected production capacity in the Oil and Gas Sector and the Downstream Oil and Gas Sector. Such conditions are common for the industries concerned.

This decline should be viewed in comparison with the high growth in the first quarter of 2024 of 7.2 per cent (which was updated in June 2025), which has made the performance of the first quarter of 2025 appear weaker.

Although GDP growth in the first quarter (Q1) of 2025 recorded a decline of -1.8 per cent, in terms of GDP value, its performance still remained at a high level when compared with the first quarter (Q1) of 2023 and recent years.

Q1 2023Q1 2024Q1 2025
GDP (BND Million)4,745.65,087.34,994.9
Growth (%)0.87.2-1.8

This is also reflected in the performance of several subsectors, where although they recorded declines in the first quarter (Q1) of 2025, in terms of GDP value they still remained among the highest compared with previous years.

For example, the Petroleum and Chemical Products Manufacturing subsector recorded a decline of -7.8 per cent in the first quarter (Q1) of 2025. In terms of GDP value, this subsector recorded a value of BND367.3 million in the first quarter (Q1) of 2025, which was slightly lower compared with BND398.3 million in Q1 2024. However, this value in the first quarter (Q1) of 2025 was still much higher compared with Q1 2023 (BND314.2 million) and previous years.

For the Other Manufacturing subsector, it recorded a decline of -14.6 per cent in the first quarter (Q1) of 2025. In terms of GDP value, this subsector recorded a value of BND37.8 million in the first quarter (Q1) of 2025, which declined compared with BND44.2 million in Q1 2024. However, this value in the first quarter (Q1) of 2025 was still much higher compared with the first quarter (Q1) of 2023, which recorded BND36.2 million, and previous years.

Similar pattern, for the Business Services subsector, it recorded a decline of -4.0 per cent in the first quarter (Q1) of 2025. In terms of GDP value, this subsector recorded a value of BND143.0 million in the first quarter (Q1) of 2025, which was slightly lower compared with BND149.0 million in the first quarter (Q1) of 2024. However, this value in the first quarter (Q1) of 2025 was higher compared with Q1 2023, which recorded BND142.3 million, and previous years.

Therefore, in assessing GDP performance, it is important that we do not look only at performance for a single period. Economic activity naturally fluctuates from one period to another, especially in the context of our economy where the performance of key sectors is easily exposed to uncertainty due to seasonal factors, maintenance schedules, global price changes, and issues such as supply chain disruptions and geopolitical tensions.

In other words, we need to look at the actual value of output compared with past performance. For example, although there may be a slight decline in one period, its value may still be higher compared with the same period in previous years, or it may be due to strong growth in the previous period, known as the 'high base effect'. Therefore, we need to look at the overall trend picture that more accurately reflects the true progress of our economy.

As a way forward, taking into account the performance of economic sectors that are easily affected by operational challenges and external uncertainty challenges, including demand affected by tariff changes and geopolitical uncertainty, continued efforts are important to broaden the economic base so that when one sector is affected, other sectors can support and cushion it as outlined in the Economic Blueprint.

That is all. Thank you Yang Berhormat Yang Di-Pertua.

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