Bhutan’s economic growth rate is expected to slow down to three per cent in 2024. This is according to the International Monetary Fund’s latest World Economic Outlook report, released yesterday. The 2024 number is a 2.3 percentage points drop from the 5.3 per cent growth projected for this year. Bhutan’s growth estimate is one of the lowest among emerging and developing Asian nations.
The country’s GDP growth rate for 2022 was recorded at 5.21 per cent by the National Statistics Bureau. However, contrary to the NSB numbers, the World Economic Outlook recorded Bhutan’s GDP growth at a modest 4.8 per cent.
As for this year, the International Monetary Fund projects Bhutan’s economic growth rate to increase to 5.3 per cent, over half a percentage point more than government projections.
Despite strong growth projections for this year, the IMF sees the country’s real GDP growth to slow down to three per cent, next year. The report also shows that Bhutan’s GDP will be only 3.6 per cent in 2028.
This dampens the government’s target to sustain growth at an average of 5.2 per cent in the next five years. According to the finance ministry’s Macroeconomic Situation report, an upward growth trajectory was projected with two hydropower projects in Nikachu and Punatsangchhu II expected to be commissioned, next year.
The government also hopes its spending continues to boost aggregate demand and investments are implemented on time to meet the GDP growth projections.
As for inflation, the rate at which the prices of goods and services increase is expected to slow down in the coming years and hover around rates, which is healthy for the economy.
Inflation rate for this year is expected to average out at about 5.2 per cent and drop to 4.4 per cent, next year.
Meanwhile, growth in emerging and developing Asian nations is projected to rise from 4.5 per cent in 2022 to 5.2 per cent in 2023, then to decline to 4.8 per cent in 2024.
In India, Bhutan’s major trading partner, growth is projected to remain strong, at 6.3 per cent in both 2023 and 2024.
Sherub Dorji
