Brunei Darussalam’s economy contracted in Q2 2025, due to a decline in the Non-Oil and Gas Sector, offsetting the increase in the Oil and Gas Sector. The decline in the Non-Oil and Gas Sector was primarily due to decreases in subsectors such as Finance, Other Manufacturing, Wholesale and Retail Trade, and Business Services. As for the Oil and Gas Sector, the increase was driven by higher production of crude oil, whilst natural gas and liquefied natural gas (LNG) production declined.

The Consumer Price Index (CPI) declined in Q2 2025, mainly due to declines in both the Food and Non-Food price indices. The drop in food prices was largely attributed to a decrease in the cost of commodities such as meat; fish & seafood; and milk; dairy products and eggs. The decline in non-food prices was mostly seen in commodities such as transport; recreation and cultures; and communication.

Despite a decline in exports, the trade balance remained in surplus in Q2 2025, as imports also fell. The drop in exports was largely driven by lower export values of crude oil, LNG, and petrochemical products. Likewise, the decrease in imports was mainly attributed to reduced importation of feedstock for the downstream petrochemical industry.

Foreign Direct Investment (FDI) flows decreased in Q2 2025, mainly contributed by a decrease in equity investments, reflecting lower reinvested earnings and higher dividend payments . However, the negative growth in FDI flows was moderated by a rise in debt instruments due to lower debt repayments to parent companies abroad.

The fiscal balance remained in deficit in Q2 2025, mainly due to a decline in government revenue, coupled with an increase in government expenditure. The drop in revenue was largely due to lower oil and gas revenues, stemming from falling crude oil and LNG prices, as well as lower collections from government operations (mainly taxes; fees, charges & rent; and others), and lower returns from investment and savings. On the expenditure side, the increase in government spending was among others, due to an increase in development expenditure, largely driven by a substantial rise in project expenditure under the Social Services Sector, notably the construction of Kg. Tanah Jambu national housing scheme project.