The Bhutanese economy is staging a recovery. This is as per data from the Asian Development Bank which shows a GDP growth forecast of 4.5 per cent this year. It was 3.5 per cent last year. Furthermore, the report states that the government’s decision to reopen the country to international tourism is expected to lift the growth to 7.5 per cent next year.
The country’s GDP growth dropped to -10.08 per cent in 2020 due to the pandemic and its related restrictions. Since then the economy is said to be improving.
As per the Asian Development Outlook 2022, all sectors are estimated to grow due to strong domestic demand supported by the government’s relief measures.
The construction, hydropower export, manufacturing and mining and quarrying accounted for nearly half of GDP growth. And this year, with further relaxations, the country’s economy is expected to improve by one per cent.
“As the economy opens up just through the normal process, you will see growth resuming. As you see small businesses can open, you will see a resumption of tourists. I believe a group of already a group of 34 tourists have come into Bhutan, as you see border controls removed,” said Shamit Chakravarti, ADB’s Country Director.
The outlook reported that the government should do more to attract the private sector as a partner and investor in economic development, diversify the economy beyond hydropower, and reduce the oversized role played by the public sector to improve the GDP in the long term.
“So, assuming that there are no more new variants, assuming the country doesn’t need to go into lockdowns and keep level of tourism very low and so on, we expect that by 2023, Bhutan should be back at the pre-pandemic levels. But that said we must understand that the fact remains that almost three years have been lost in Bhutan’s growth story,” added the Country Director.
As per the report, the countries in Developing Asia have generally expected growth of 5.2 per cent this year, triggered by a robust recovery in domestic demand and continued expansion in exports.
Developing Asia comprises of 46-member countries of ADB by geographic group: the Caucasus and Central Asia, East Asia, South Asia, Southeast Asia and the Pacific.
Edited by Sangay Chezom