The country’s economic growth has slowed in 2018 according to the National Statistics Bureau (NSB). The NSB has attributed the effect to lower productivity in the electricity and construction sector. GDP growth last year, at 3.03 per cent, is the second-lowest ever recorded.
The NSB’s National Accounts Statistics 2019 states electricity, construction, general government administration, and forestry and logging all experienced negative growth, which led to the slowdown. The sectors which slowed down makes up over 35 per cent of the GDP.
The GDP growth rate of 3.03 per cent in 2018 is 1.62 per cent lower than in 2017. However, despite the slow growth rate, the gross domestic product in nominal terms increased by almost Nu 8bn. The GDP per capita also increased by 3.19 per cent to close to Nu 230,000.
Gross national savings saw a slight increase of 0.85 per cent. However, the sluggish increase in national savings was not able to meet the investment requirements of the economy. While investment required was Nu 79.4bn, the national savings only amounted to about Nu 42bn.
The consistent increase in the final consumption expenditure of households and the government, coupled with a poor net inflow of primary income from abroad led to the sluggish increase in national savings.
Among the major economic sectors, the primary sector, which includes agriculture, livestock, and forestry grew by 1.41 per cent. The tertiary sector, which is the service sector, saw growth of almost Nu 10bn. However, the secondary sector, which has a 38 per cent share of the economy recorded a negative growth rate of -2.06 per cent.
Within the secondary sector, the construction sector, which is one of the key sectors of the economy has continuously recorded negative growth rates for the past two years with no signs of improvement to date. However, with the commissioning of the Mangdechhu Hydropower Project, 2019 numbers are expected to improve.
Sherub Dorji
