Bhutan’s economy is projected to grow steadily at 4.9 per cent in 2024 before surging to an impressive 9.8 per cent this year. According to the Royal Monetary Authority’s Annual Report 2024, the optimistic outlook is attributed to increased government investments under the 13th Five-Year Plan, the Economic Stimulus Programme, the commissioning of new hydropower projects, and a robust recovery in the tourism sector.
Industrial output is expected to be a key growth driver, with projections indicating an increase from 6.2 per cent in 2024 to 20.1 per cent in 2025.
The electricity sector is set for significant expansion, fueled by rising domestic consumption and the commissioning of the Punatsangchhu II hydropower project. Growth in this sector is anticipated to soar from 2.9 per cent in 2024 to 19.8 per cent in 2025, boosting power-intensive industries.
The construction sector, which saw a 7.2 per cent contraction in 2023, is on track for a strong revival, projected to grow by 12.1 per cent in 2024 and a remarkable 29.9 per cent this year. This recovery will be driven by strategic government investments and the central bank’s decision to lift the loan moratorium.
Tourism is also expected to play a pivotal role, with the government aiming to attract 200,000 visitors in 2024 and 300,000 in 2025. The service sector, including hospitality, transportation, and entertainment, is forecasted to grow by 5.3 per cent in 2024 and 4.4 per cent in 2025, boosted by the tourism revival.
Meanwhile, the agricultural sector is expected to grow modestly at an average rate of 1.5 per cent, driven by improvements in livestock production.
According to the report, Bhutan’s domestic economic activity is gaining significant momentum, though growth still falls short of pre-pandemic levels, registering 4.9 per cent in 2023.
Samten Dolkar
Edited by Tandin Phuntsho
