In response to a question during ‘meet the press’ on the current government not achieving the 10 percent growth rate targeted in it’s manifesto, the Prime Minister while acknowledging it would not be possible said a lot had been achieved.
The PM said that the 11th plan document had predicted an average growth of 12 percent premised mainly on the completion of the three mega projects P I, P II and Mangdechu well within the 11th plan period.
Giving examples the PM said that 11th plan document showed that in 2016-17 fiscal year there would be a 17 percent growth followed by 24 percent in 2017-18.
He said more than 80 percent of these then projected growth figures were due to the completion of the three projects and the revenue generated from them.
The PM essentially said that despite none of the hydro projects coming on line due to geological surprises and an economic crisis at play in 2013, the incumbent government had restored the economy to good health and generated economic growth rates that are among the world’s highest.
The PM said that going by the World Bank data Bhutan in 2013 had grown by only 2.1 percent which was 134th among all countries. He said in 2014 this growth became 5.4 percent and Bhutan was placed at the 42nd position. In 2015 there was 6.6 percent growth and Bhutan ranked 20. In 2016 the growth reached 8 percent and Bhutan became the sixth fastest growing economy in the world.
The PM said that since the World Bank data is not yet out for 2017 the International Monetary Fund outlook report published last year predicted Bhutan to grow by 8.4 percent in 2017 making it the third fastest growing economy in the world just behind Myanmar and Ivory Coast.
Lyonchhen said that if one went by The Economist ‘World in numbers’ figures then Bhutan is predicted to be the fastest growing economy in the world by 2018 and 9.2 percent.
The PM said that while the 10 percent growth could not be achieved due to geological surprises delayed hydro projects what has been achieved despite that since 2013 is nothing short of spectacular. The PM said that these are growth rates measured and projected by the WB, IMF and The Economist.
Lyonchhen said that the government despite hydro not coming in had taken various other initiatives. He said the REDCL and the Priority Sector Lending (Nu 1.5 bn a year) combined would mean huge investments in agriculture and cottage industries. The PM said that fuel prices had been slashed as an incentive and once the hydro projects are completed there would be industries coming up for which the government was constructing industrial estates in Dham Dhum, Jigmeling, Motanga and Bondyema. He said all this would add to growth in the future.
The PM said that the nation might want to celebrate as the increased economic growth was not just due to the government but due to the efforts of the people.
The Finance Minister Lyonpo Namgay Dorji said that in 2013 when the government came in the health of the economy was very poor.
Bhutan at the time was facing a rupee crisis, banks had stopped giving credit in various sectors including housing and there were various import bans.
The FM said that by any conventional economic theory a country takes 10 to 15 years to recover from such an economic crisis but Bhutan had made a much faster recovery and was now doing well.
The FM also alluded to the reduced loan interest rates that had been achieved in consultation with the Central Bank. The FM later mentioned other measures like the PIT tax exemption which benefited the poor and the middle class the most.