The total public debt has reached Nu 303.9bn as of June this year. That’s about the same size as the entire economy, about 100.5 per cent of the Gross Domestic Product, GDP. According to the latest Public Debt Situation Report released by the Ministry of Finance, the debt rose by nearly Nu 6bn from the previous quarter, an increase of nearly 2 per cent.
The increase came from both external and domestic borrowing.
Out of the total debt, approximately Nu 279.3bn is borrowed from foreign countries, accounting for nearly 92 per cent of Bhutan’s GDP.
Of this, Nu 170bn or about 61 per cent of external debt is linked to hydropower projects such as Punatsangchhu I and II, Mangdechhu, Nikachhu, Dagachhu, and Basochhu.
India holds 64 per cent of the total external debt, followed by the Asian Development Bank and the World Bank.
Meanwhile, domestic debt also increased to Nu 24.6bn, or 8.1 per cent of GDP, from 21bn in the previous quarter.
This includes government bonds and an overdraft facility with the Bank of Bhutan. As of June, this overdraft stands at 3.55 billion ngultrum, and bonds outstanding of Nu 21.10bn.
Despite high debt levels, the report says the risk is manageable, as most of Bhutan’s debt is long-term, low-interest, and secured by hydropower exports.
Tashi Dekar
Edited by Tandin Phuntsho
