Modest Growth Of 5.1% Projected For Bhutan's 12th Five Year Plan

Email

The agriculture sector continues to be the major employment provider in Bhutan’s economy.

Bhutanese students learn the traditional art of tailoring and embroidery (Tshem Zo). (Source: Choki School)

 

By Staff Reporter The Bhutanese

According to the current assessment of Bhutan’s baseline growth forecast, a modest growth of 5.4 percent in the medium term and 5.1 percent on an average for the 12th Five Year Plan (FYP) has been projected.

A slowdown in growth is projected mainly on account of the shifting of the commercial operation date of Punatsangchu - I and II to the next plan. It is also compounded by the delay in the commissioning of the Mangdechu Hydro project and Nikachu Hydro project.

It is anticipated that a higher growth of 6 percent and above could be achieved in the 12th FYP. It can be attained by expediting the commissioning of Punatsangchu II and starting the construction of Sunkosh hydropower project within the plan period.

In addition, attracting additional Foreign Direct Investments, Public Private Partnerships and implementing major fiscal reforms such as GST can help to propel economic growth.

The service and manufacturing sectors are expected to greatly contribute to the country’s economy with a share of 48 percent and 41 percent respectively. The agricultural sector is expected to contribute 11 percent of the sector share in the 12th FYP.

Employment rate in Bhutan

The agriculture sector continues to be the major employment provider in Bhutan’s economy. It hires about 57.2 percent of the labour force, followed by the service sector at 34.2 percent and the industry sector employing 8.7 percent.

 

Photo: Bhutan swallow tail

 

The unemployment rate in 2016 was 2.1 percent which is an improvement of 0.4 percent points from 2015.

In hindsight, the adoption of policies focused in skill development in the service industry could have been an important source for generating gainful employment for Bhutanese youth.

External Sector

External sector performance during the 12th FYP is likely to improve as the current account deficit is projected to fall to a single digit which will be adequately financed by surplus from capital and financial flows. Thus, the overall balance of payment is estimated to remain positive at 2.8 percent of GDP on average.

Exports are projected to increase by 1.12 percent with the commissioning of the Mangdechhu Hydropower Project while imports are also projected to increase at an average of 1 percent. However, imports will increase if the new hydropower projects are taken up.

Reserves

In the 12th FYP, international reserves is estimated to increase at an average of 5.2 percent, contributed mainly by tourism sector inflow, budgetary grants and hydropower disbursements.

 

Tshechus (Festivals) are major highlights for tourists visiting Bhutan.

Photo: Druk Asia

 

The total reserves for the fiscal year 2018-19 is estimated to be at US $1,440 million, an increase by 11.2 percent from the previous year.

Resources

The total resources for the 12th FYP is estimated to be at Nu 280 billion, which is an increase of 31 percent from the previous plan. Of the total estimated resources for the 12th FYP, 85 percent comes from domestic revenue and the balance is from grants from Bhutan’s development partners.

For the fiscal year 2018-2019, the estimated resources is Nu 39 billion, which accounts for 14 percent of the total estimated resources of the 12th FYP.

Grants

Total grants estimated for the 12th FYP is Nu 63 billion which is about 22 percent of the total resources. The grants from the Government of India accounts for 71 percent of the total grants while the rest is expected from other development partners.

For the fiscal year 2018-19, the estimated grants stand at Nu 5 billion, of which Nu 3 billion is from the Government of India.

Public Debt

Based on the loan agreement signed for the on-going projects and requirement for financing, the estimated fiscal deficit and public debt is projected to hit Nu 249 billion by the end of the 12th FYP.

It will account for 87 percent of Bhutan’s GDP, which will be an increase of 33 percent from the previous years.

  

This article first appeared in The Bhutanese and has been edited for the Daily Bhutan.


Related Posts

Bhutan’s National Revenue Records 24 Percent Growth

According to the provisional revenue report 2017-18, tax revenue increased to Nu 27.10B, an increase of 25 percent from...

Nov 23, 2018 12:05

According To The World Bank, Bhutan Ranked 81st In Ease Of Doing...

The rankings were determined by sorting the aggregate scores on 10 parameters, each consisting of several indicators.

Nov 05, 2018 15:45

Founder Of ‘Sushi’s Candles & Crafts’ Wants To Inspire More Women...

Sushanta wants to set a shining example for more women in Bhutan to fulfil their dreams of starting their own...

Jan 05, 2019 15:19

First-Ever Women’s Edition Of The Start-Up Weekend In Bhutan Aims...

Eighteen women from diverse backgrounds took part in the event, where they pitched business ideas, worked in teams and...

Nov 27, 2018 13:26

Housing.Bt Received Funding From An Investor Through The Jab-Chor...

The Yarkay Group Private Limited supported Housing.bt with Nu 2 million.

Jan 07, 2019 13:58

Jab-Chor—A Platform For Young Entrepreneurs In Bhutan To Nurture...

Jab-Chor was inspired by His Majesty’s aspirations for the youth of Bhutan.

Dec 19, 2018 15:03

Latest

News

Ten Years Since The Inception Of Democracy, Bhutan Has Made Steady Progress In Human Development

The National Human Development Report highlights positive results during ten years of democracy in Bhutan.

Mar 21, 2019 15:08

Tiger Numbers Increase In Bhutan

As the world tries to double tiger number from where it was in 2010, Bhutan’s increase in tiger numbers shows that at least one country is...

Mar 19, 2019 14:18

Features

It Is International Day Of Happiness: How Will You Be?

Christopher Boyce left home in the UK over 500 days ago and covered 20,000kms to get to Bhutan by cycling.

Mar 20, 2019 17:22

From Bhutan To College Campuses, Calculating Forests Into The Many Meanings Of Happiness

Forests are part of literal equations for personal and societal happiness.

Mar 20, 2019 14:10

Sports

Bhutan To Hold First 'Sports And Culture Festival' For Runners And Cyclists

There are two tiers to the event, comprising of a full-race distance of 50km and a half-race of 25km.

Mar 06, 2019 17:14

Bhutan’s HRH Princess Eeuphelma Choden Wangchuck Attended The General Assembly of the Asian Paralympic Committee In Dubai

The General Assembly is the highest decision making body of the Asian Paralympic Movement.

Feb 08, 2019 18:15

Business

Celebrating Bhutan's Entrepreneurs: Sonam Lhamo Of Bumthang Milk Processing Enterprise

This story is part of an exclusive feature by Yeewong Magazine in Dec 2018 on celebrating entrepreneurship in Bhutan.

Mar 18, 2019 10:19

Need For More Women Entrepreneurs To Partake In Bhutan’s Economic Development

The 2018 Global Gender Gap Report has ranked Bhutan 122nd out of 149 countries on a global index.

Mar 14, 2019 20:54

Travel

Tourists Visiting Bhutan Can Look Forward To Exciting Heli-Biking And Heli-Hiking Services

Heli-Biking and Heli-Hiking services are in the pipeline to attract more tourists to visit the remote parts of Bhutan.

Mar 20, 2019 20:18

50 Years Since The Renovation Of Tashichhodzong - Fortress Of The Glorious Religion In Bhutan

In the fifty years since its renovation, the Tashichhodzong remains an architectural marvel.

Mar 17, 2019 11:08

Lifestyle

Food Review: Cloud9 Cafe & Bar

Cloud9 has always been known in Thimphu for dishing out handcrafted gourmet burgers.

Mar 09, 2019 09:44

Tshering Zangmo Represents Bhutan At The 5th Young Chef Olympiad In India

Tshering Zangmo has successfully made it to round two of the Olympiad.

Feb 04, 2019 16:35

Subscribe to our newsletter

Never miss out on new happenings and news stories!