Bhutan’s economy grew by almost six per cent in the first quarter of 2026. But beneath this headline number lies a reshuffling of the forces driving the country’s growth. The National Statistical Bureau, in its latest Quarterly GDP report shows that the industry sector is growing, while services are cooling, and agriculture is under pressure.
At current market prices, the size of Bhutan’s economy reached Nu 69.4bn, around Nu 6bn more than the same period last year. As per the report, the growth was driven by two main factors – increased production and rising prices of goods and services.
The industrial sector, which accounts for roughly 28 per cent of GDP, has been the primary engine of growth in the first quarter. It recorded an increase of almost 14 per cent compared to 3.1 per cent in the same quarter last year. The NSB attributes this surge largely to a strong performance in the electricity sub-sector, which is a familiar driver in an economy where hydropower remains central.
The services sector tells a different story. It remains the backbone of the economy, contributing 62 per cent of GDP. However, its growth slowed in the first quarter of 2026. After expanding at 9.6 per cent in the first quarter of 2025, services grew by just around four per cent this first quarter.
Agriculture had the most difficult quarter among the three sectors. It contracted by 1.4 per cent. This is a reversal from the almost eight per cent growth it recorded in the first quarter of 2025. The sector’s share of GDP also slipped slightly, from 10.26 per cent a year ago to 9.74 per cent today.
As opposed to the first quarter of 2025, this quarter’s overall growth rate of 5.78 represents a deceleration of 2 percentage points. While the economy continues to grow, the pace has eased and the composition of that growth is shifting, with industry outpacing services for the first time in recent quarters.
Meanwhile, as per the finance ministry’s economic outlook, the country’s economy growth is expected to be around 6.9 percent this year.
Passang
