The freeze on construction loans and ban on import of cars, besides other restrictive fiscal and monetary measures, did not only suppress economic growth, but also affected government’s revenue collection.
In light of excess liquidity in the financial system, the Royal Monetary Authority (RMA) had issued a notification to revise the Cash Reserve Ratio (CRR) of financial institutions from the existing 5 percent to 10 percent.
The Business Opportunity and Information Centre (BoiC) has approved 149 projects of 500 applicants from the six Eastern Districts. The applications were approved after BOiC’s regional office in Trashigang opened yesterday.
An increasing number of people are buying new cars despite tax revision on vehicles. Between July and December, last year, Road Safety and Transport Authority registered over 2,572 new vehicles.
The revised Foreign Direct Investment (FDI) policy will now allow foreign investors to take dividends or profits in convertible currencies. Earlier policy restricted conversion of profits resulting the country’s first-ever FDI company, G4S, to pull out.
While local banks, economists and the opposition believe there is excess money lying idle in the financial system, the government thinks otherwise.
Bhutan’s consumer inflation continued to drop, reaching an all time low of 6.3 percent in December, last year. In November, inflation recorded was 6.6 percent.
The total amount of non-performing loans or bad loans in the commercial banks has increased from Nu 3B in 2010 to Nu 7.6B last year. In other words 12 percent of total credit dished out by the financial sector has defaulted.
Bhutan’s consumer inflation fell to 6.6 percent in November last year, the lowest recorded so far in 2014. The decrease in the rate of inflation was driven mainly by a reduction in the price of fossil fuel.
The decrease in global fuel prices is pushing down the prices of goods and services in the local economy too. However, the decrease is not being felt, as much as, it is in the international market.
