The Bhutanese economy is projected to further drop by 3.4 per cent in the current fiscal year from 0.9 per cent in the last fiscal year. This according to the Asian Development Outlook 2021 is the most significant shrink since 1991. The report attributes the drop in GDP to the pandemic.
According to the Asian Development Bank (ADB), stringent pandemic containment measures adopted by the government, including two prolonged nationwide lockdowns impacted the economy. Border closure from March last year disrupted supply chains, severely affected tourism and caused an exodus of expatriate workers that left a severe shortage of labour and skills.
“Under the dynamic leadership and benevolence of His Majesty, Bhutan has averted full-blown health crisis while securing a livelihood. Economic growth in Bhutan is forecast to contract by 3.4% this fiscal year 2021 from 0.9% in the fiscal year 2020 on account of stringent containment measures including two prolonged nationwide lockdowns that stifled economy activities in all sectors,” said Tshewang Norbu, Officer In-charge, Bhutan Resident Mission, Asian Development Bank.
The growth in electricity generation by more than 43% has cushioned the decline last fiscal year. However, the report states that the economy is expected to recover to 3.7% in the fiscal year 2022 considering the country’s strong response to COVID-19 including the vaccination drive.
“As well as we expect the government to boost investment spending, the government is planning on accelerating the implementation of capital projects. We also expect some revival in the tourism sector and global economic recovery, particularly in India. These are some of the factors that we have taken into consideration while looking into growth revival in the Fiscal year 2021-2022,” added Tshering Lhamo, Economics Officer, Asian Development Bank.
She added the risk imposed by virus outbreak with a new variant, slower revival in tourism and global economic recovery could change the projection.
Sangay Chezom
