ASEAN KEY DESTINATIONS
Brunei’s healthcare sector projected for modest growth
STRONG demand for medical services may help Brunei’s healthcare sector grow despite the low oil prices, according to the latest analysis from Business Monitoring International (BMI) Research.
The business intelligence company noted that healthcare spending in Brunei will continue to see modest growth, citing a strong demand for medical services due to the country’s disease profile.
“Brunei’s epidemiology will be central factors supporting the rise in healthcare spending. Chronic conditions have already become the primary cause of mortality, accounting for 81 per cent of total deaths in 2012, according to the World Health Organization (WHO),” said the report which was published yesterday.
It noted that changing dietary lifestyles and ageing population, with those aged 65 and older projected to go up from 4.4 per cent in 2015 to 8.6 per cent in 2025, would add to the demand for medical services.
“The ageing population in particular is a dominant factor, as reflected in a breakdown of cancer deaths by age,” the report said.
According to data from the World Bank and the Global Health Data Exchange in 2013, cancer mortality rates rises from four in 100,000 among males aged one to four, to 2043 in 100,000 in males aged 80 and above.
Despite those factors, the report said, healthcare spending is strongly tied to oil prices as it remains the main source of revenue from the government, which accounts for 93 per cent of total healthcare spending in 2015, totalling at $512 million.
This was projected by BMI to rise to $545 million by 2025.
“While the size of the healthcare market in Brunei is small, per capita spending is substantial, amounting to US$882,” said BMI Research, adding that this was around twice that of China and Malaysia and nearly ten times the amount spent per capita in Indonesia.
The report said that while they maintain their view that the Brunei government will continue to prioritise healthcare provisions, the low oil price environment will influence its ability to increase spending.
“With total income from hydrocarbons comprising approximately 90 per cent of total government revenue, the fall in oil prices has significant impact on the government’s fiscal position with a budget balance at negative 8.5 per cent of GDP in 2015.”
This business environment has not left healthcare unaffected; the government cut its healthcare budget by nine per cent to amount to $349 million for the fiscal year of 2016/2017.
However, the report said that it expects government year-on-year spending growth to slow in 2016 before seeing a gradual pickup over the next few years.
“This is underpinned by BMI Country Risk team’s projection for Brunei’s fiscal deficit to bottom out at 10.4 per cent of GDP and recover over the next decade as oil prices recover marginally,” said the report.
Within the healthcare industry, BMI believed that pharmaceutical spending will be most at risk as other austerity measures, which could increase private contributions, will be politically challenging to implement.
The Brunei Times
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