Businesses in the capital are seeing a downturn in sales. Except for overseas education consultancies, other businesses such as automobile workshops, general stores, garment shops, hotels and restaurants among others have slumped after the COVID-19 pandemic. According to an economist, reduced private spending, a fall in remittances, and a limited number of tourists have led businesses to struggle. However, with the economic growth rate more than projected for last year, economists forecast the situation to improve.
From grocery stores to tailoring shops to beauty parlours and the film industry, businesses are seeing a decline in their sales.
Business owners say sales started dropping gradually after the lockdown.
“In the past, we used to get around Nu 100,000 in a day. Now, we can barely get Nu 10,000 to 15,000 per day. Our sales have gone down drastically. After the government announced the pay hike for public servants, we were hopeful that we would get more customers but it is the opposite for us,” said Tshering Dorji, a shopkeeper.
“There was not much difference in sales from 2019 to 2021. We could get around Nu 70,000 per day. After the end of 2022, we can only make between Nu 10,000 to 30,000 a day,” said Kencho Namgay, another shopkeeper.
“Business was better before. After the lockdown, the number of customers started decreasing day by day. As you can see today, there are no customers,” said Kalpana Rai, a garment retailer.
Similarly, vegetable vendors shared that they have experienced a drastic decline in their businesses, with some barely able to get Nu 1,000 per day.
Despite the number of vehicles visibly as usual, the automobile workshop business has also plummeted.
“Around 20 vehicles used to come to our workshop for repairing works before. Now we can barely get around ten vehicles in a day,” said Pema Norbu, an automobile workshop owner.
“These days, although a lot of people are moving overseas, there are still a lot of cars in the town. But, we barely get vehicles in our workshop. If the scenario could be like before, we would be able to afford better salaries for the employees. Sometimes we can barely afford to pay the employees,” said Lhakpa Sherpa, another automobile workshop owner.
Tailoring businesses and beauty parlours shared similar challenges. Some of them shared that their businesses have declined by over 30 to 50 per cent.
Similarly, restaurant owners said that with a reduced number of regional tourists, they barely get customers.
According to Sanjeev Mehta, an economics professor at the Royal Thimphu College, factors such as reduced private spending, reduced remittances, and a low number of tourists have led to a decrease in overall business in the country.
He said that especially in tourism, the whole trickle-down effect of tourism has affected overall business in the country.
“Looking from the perspective of the overall business scenario, it is not very good with the migration and there’s even a skills shortage. So, now all these factors have been coming together. Maybe over the period, things would improve with high remittances, aggregate demand would spur up and that would contribute to better business opportunities in the coming future,” said Sanjeev Mehta, Economics Professor at Royal Thimphu College.
He added that there is a lot of competition, especially in the wholesale and retail trade. He said that there are multiple businesses, which are trading similar things which has also affected businesses adversely.
Despite the fall-off in commercial activities, overseas consultancies are doing fairly well. Some of the consultancies said that on average; they get around 20 clients per day.
According to the National Accounts Statistics, the country’s economy recorded a growth of 5.21 per cent in 2022, marking a 0.79 percentage point increase from 2021.
Tashi Yangden
Edited by Kipchu
