The country’s economy is expected to grow at 8.5 per cent this year, according to the Asian Development Outlook released today. The Asian Development Bank’s report revealed that the growth is driven by major hydropower projects and a recovery in the tourism sector.
According to the Asian Development Outlook, the industry sector will be the key driver of the country’s economic growth, contributing 18.6 per cent this year.
This increase is attributed to the commissioning of the Punatsangchhu Hydropower Project II and the start of construction of the Khorlochhu Hydropower Plant this year.
However, the industry sector is likely to experience decelerated growth by next year, slowing overall economic expansion. This is because the contributions from the Hydropower Projects are expected to decline compared to the initial surge from their commissioning and construction.
With international tourist arrivals on the rise, the outlook forecasts the tourism sector to grow by 4.9 per cent.
Moreover, the agriculture sector is expected to continue to grow, boosted by forestry and logging activities. The government’s decision to permit timber exports from the beginning of this year is expected to further support the growth in the sector.
The inflation rate in the country is expected to rise to 3.4 per cent, an increase of 0.6 per cent as compared to last year. The inflation will be caused by increasing food prices.
The ADB report also states that the country’s economy grew by 5.5 per cent last year, up from 4.9 per cent in 2023. The growth was mainly due to an increase in public investment and forestry activities, which provided a boost to the agricultural sector.
Karma Samten Wangda/Deki Lhazom
Edited by Sangay Chezom
