Bhutan’s total public debt stands at Nu 193B as of March this year, which is an increase of Nu 8.5B from June 2019. The debt to GDP ratio is 100.8 percent according to the National Budget FY 2020-2021 report.
Of the total public debt, more than Nu 189B is external debt and around Nu 3.2B of domestic debt. The hydropower debt accounts for 74.8 percent of the total external debt, which is around Nu 141B.
The report states that hydro debt is expected to increase by around Nu 17B by the end of this financial year. The increase is due to the inclusion of Mangdechhu Hydropower Project’s interest during the construction and also because of the loan disbursements during this financial year for the ongoing hydropower projects.
Similarly due to projects and programme borrowings from Asian Development Bank (ADB), World Bank and International Fund for Agricultural Development (IFAD), non-hydro debt is expected to increase from Nu 44.1B to Nu 54.9B by the end of this financial year. The depreciation of the Ngultrum against USD is also expected to contribute towards increase in non-hydro debts.
The report states that in the upcoming financial year, the government will start paying off the debt for Mangdechhu Hydropower Project. Around Nu 2.4B will be paid to government of India, which comprises 44.1 percent of external debt servicing for fiscal year 2020-2021.
Sangay Chezom
