Download PDF Quick Facts Population: 0.4 million

GDP (PPP): $34.6 billion -0.2% growth -0.9% 5-year compound annual growth $79,530 per capita

Unemployment: 9.2%

Inflation (CPI): 0.1%

FDI Inflow: $504.0 million

Brunei Darussalam’s economic freedom score is 66.6, making its economy the 61st freest in the 2020 Index. Its overall score has increased by 1.5 points, led by higher scores for property rights and government integrity. Brunei Darussalam is ranked 13th among 42 countries in the Asia–Pacific region, and its overall score is well above the regional and world averages. Economic freedom has declined slightly in Brunei Darussalam over the past five years, and the country’s economy remains firmly in the moderately free category. That perfomance has been mirrored by weak GDP growth during the same period. The major factor holding back Brunei Darussalam in the Index of Economic Freedom is its very poor performance on the fiscal health indicator. Its relatively low score on financial freedom also needs to be addressed. Although the government is making efforts to improve the business environment, the energy sector’s continuing domination of the economy is likely to limit reforms in other sectors. Read more about Brunei Darussalam Economy. Close Background Brunei, consisting geographically of two enclaves surrounded by Malaysia, lies on the northern coast of Borneo. The sultan serves as prime minister, minister of defense, foreign minister, and minister of finance. He appoints several advisory councils, including a Legislative Council and Privy Council. The sultan’s 2019 decision in favor of partial implementation of Sharia law was met with international condemnation. Oil and gas production, which provides 90 percent of government revenue and 90 percent of exports while generating few jobs, accounts for more than half of Brunei’s GDP. Most people work directly for the government. Economic growth has stagnated because of lower global oil prices and OPEC production caps. Brunei has little manufacturing capacity and imports most of its manufactured goods and food.

Rule of LawView Methodology

Protections for private property are not strong, although property registration has improved. The government established a commercial court in 2016 to enforce contracts. Only citizens may purchase land. The constitution does not provide for an independent judiciary. Brunei is one of the world’s last remaining autocracies, and the sultan wields nearly absolute power. The levels and extent of corruption are relatively low.

Government SizeView Methodology

Brunei has no personal income tax. The top corporate tax rate is 18.5 percent for most companies and 55 percent for oil and gas companies. The overall tax burden equals 26.0 percent of total domestic income. Government spending has amounted to 35.8 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 13.6 percent of GDP. Public debt is equivalent to 2.5 percent of GDP.

Regulatory EfficiencyView Methodology

In an effort to diversify beyond hydrocarbon exports, the government has simplified the processes for starting a business and getting electricity and has improved access to credit. The Manpower Planning Council is setting up a labor–management information system to reduce unemployment among college graduates. Heavy government subsidies continue for many basic goods and services such as fuel, power, food, health care, and education.

Open MarketsView Methodology

The total value of exports and imports of goods and services equals 93.9 percent of GDP. The average applied tariff rate is 0.0 percent, and one nontariff measure is in force. The economy is open to foreign investment as the government continues its economic diversification efforts to limit its reliance on oil and gas exports. The small financial sector remains dominated by banking, which is open to foreign competition.