Abstract: GDP data is a commonly used metric for economic measurement but the publication lag and the absence of forward-looking elements are its shortcomings. Brunei Darussalam Central Bank (BDCB) created the Business Sentiment Index (BSI) as an alternative indicator to assess the economy's current state and potential future trajectory, in line with the BDCB Order, 2010. The BSI measures the level of business confidence through the monthly feedback collected from businesses of all sizes within the eleven sectors of the economy, where respondents also shared issues that may benefit or hinder their business activities.
Over 600 businesses are included in the monthly sample. The survey data is processed to compute for diffusion indices, which are available for each sector and the overall private sector. The BSI is based on businesses' perceptions of current business conditions and is scaled according to the size of the businesses and sector. Other diffusion indices generated : (1) businesses' expectations for future business conditions; (2) businesses' current investment expenditure; (3) businesses' expectations for future investment expenditure; (4) businesses' current employment changes; (5) businesses' expectations for future employment changes; (6) businesses' perception of current business costs; and (7) businesses' expectations for future business costs. As COVID-19 restrictions on Brunei Darussalam had eased in August 2020 when the project commenced, the BSI results can be used to draw some insights into the impact of the subsequent August 2021 and February 2022 COVID-19 waves on businesses and economic performance. The BSI is published monthly and it acts not just as a value-add to the economic surveillance efforts but also fulfill the role of a forward looking indicator for Brunei Darussalam.
Speaker: Dr. Irene Yap is the Executive Director of the Economic, Research and Statistics (ERS) Office at the Brunei Darussalam Central Bank (BDCB).