The primary sector of the economy which includes agriculture, livestock and forestry saw one of the highest growths in the last five years last year. It recorded a growth of 4.57 per cent. It is an increase of more than 3 per cent from 2019. This is as per the third State of the Nation report.
The growth of the primary sector is attributed to improvements in performance in these sectors. The agriculture sector’s contribution to GDP increased from 15.78 per cent in 2019 to 19.23 per cent last year. The sector exported renewable natural resource products worth more than Nu 770 M last year.
The hydropower sector also remained resilient to the impacts of the COVID pandemic and mitigated the overall adverse impacts on the economy. The sector recorded a substantial increase in electricity export earnings made possible by the commission of the Mangdechhu hydropower plant. The hydropower plants generated about Nu 30bn last year out of which the Mangdechhu project alone contributed about Nu 13bn.
However, the country’s Gross Domestic Product growth rate dropped to an all-time low of negative 10.08 per cent last year. The GDP growth rate was 5.76 per cent in 2019. The key sectors that contributed to the contraction of the economy were mining and quarrying with a negative growth rate of about 81.84 per cent, closely followed by Hotel and Restaurants with a negative 73.46 per cent. The growth of the manufacturing, construction, and transport and communication sectors also saw a significant decrease.
However, the report states that the Druk Gyalpo’s Relief Kidu in the form of income and interest payment support to affected individuals effectively mitigated the adverse impacts to a large extent. According to the report, some 49,000 individuals received the Royal Kidu at least once. Since April last year, more than Nu 3.6bn has been dispersed to those affected by the pandemic.
As part of the economic recovery measure, the government identified new investment areas. The government has approved 40 new domestic industrial projects this year worth about Nu 19bn. They will generate at least Nu 15bn annually to offset the loss of tourism revenue. Six FDI projects worth more than Nu 700 M has also been approved.
Furthermore, the government approved more than 4,000 new Cottage and Small Industries this year to create employment opportunities, value addition to local resources, and reduce imports.
Tshering Zam/Phub Gyem/Sonam Pem
Edited by Yeshi Gyaltshen
