The country’s Gross Domestic Product (GDP) is likely to drop further to -6.1 per cent. In the previous estimate in June, the economic growth was projected to decelerate at -2.1 per cent amid the blow from the COVID-19 pandemic. This is as per the Prime Minister’s State of the Nation Report.
The country’s economy is expected to be revived as soon as the pandemic ends. The State of the Nation Report states that there is a strong rebound of 4.2 per cent in economic growth next year.
“In 2018, the country GDP was at around 3.5 per cent and in 2019 at around 4-5 per cent. And this year, we projected around 6-7 per cent. However, due to the pandemic this year, I feel it is decreasing every day. According to the report distributed a week ago for this quarter, they have forecasted that our GDP will drop by -6.7 per cent. It is worrisome but we don’t have to panic because comparing to other countries, we are doing fairly well. Some countries which are developed have dropped by -11 to -12 per cent,” said Dr Lotay Tshering, the Prime Minister.
As per the National Budget report 2020-2021, the country’s economic growth projection before the pandemic was 6.9 per cent.
Moreover, the report also shows the estimated fiscal deficit of more than Nu 15bn to the revised GDP of Nu 184bn. The Prime Minister said, “From the Nu 15bn, Nu 13bn is from the domestic borrowing. And when we use domestic borrowing to meet the current expenditure, it helps a lot for the country’s economy. When the government borrows money from the bank and invest in constructions and in private sectors in the community, this money comes back to the bank.”
The fiscal deficit is projected to remain elevated as the government’s spending continues to rise due to the implementation of COVID-19 relief and recovery measures. Moreover, non-hydro revenue has not picked up.
Sangay Chezom
