Economic situation is not dire as it seems: PM

During the First Sitting of the 7th Session of the Parliament, the Member of Parliament (MP) from Bartsham-Shongphu constituency, Passang Dorji, raised a question to the Prime Minister (PM), asking what the government plans to do to solve the issue of debt, develop the private sector, improve agriculture sector, solve the youth unemployment issues, and convert the economy to an export-driven one.

To which PM Dasho Dr Lotay Tshering replied, “The minus 10 GDP is as of 2020, but according to calculations made by the Ministry of Finance, as of 2021 the GDP has recorded growth of 3.5 percent, and the NSB will release this report around the seventh month of this year. The relaxations have started, so this information could mislead the public. The pandemic started in 2020, and in 2020 the imports declined to Nu 48 bn and export to Nu 28 bn.”

In 2021, the export declined to Nu 24 bn, the lowest drop in export recorded. However, in 2021-2022, the export increased to Nu 25 bn, and as of now, exports have hit Nu 26 bn.

“This is because the export has gone remarkably well in spite of the fact that the country has not come up with any new products or ideas. We have been exporting the same commodities, as before, and compared to 2020 (pandemic times), the number of exports have improved. The economic situation isn’t as dire as it seems. There has been no issue with the economic fundamentals and the decline in economy is only because of COVID-19 restrictions imposed,” said PM.

According to PM, within six months of relaxing the COVID-19 restrictions, the export volume has improved while imports has also drastically increased.

PM said, “Now the import exceeds Nu 80 bn while the import back in 2019 barely crossed Nu 70 bn. The increase in imports signifies increase in consumption as well as improvement of work situation. One of the aspects which I do not like is the quality of imports, on inspection of what items are being imported. One of the biggest imports are petroleum products, followed by food and drink items, which attributes to around Nu 40 bn. On the other hand, there is no import of items meant to improve the economic situation, empower the youth and increase human resources. Majority of items are consumable edibles. the quantity of imports has improved, but not the quality.”

PM pointed out that one of the highest export is the hydropower energy (Nu 23 bn to Nu 24 bn per year) followed by boulder export.

“There isn’t much evaluation done on the exports. We mustn’t focus on segregating the debts into hydro and non-hydro, but instead focus on clearing the debt.  The debt incurred during the pandemic isn’t alarming. The non-hydro debt attributes to thirty percent of the GDP. In order to improve the situation of the country, His Majesty initiated the Kidu program for two-three years. We have been developing skilling programs to ensure that each and every person in the nation can start their own work or jobs, and in my opinion, we have started lots of programs that will help improve the economy of the nation,” PM informed the House.

PM said that purchasing a commodity that is not produced in Bhutan exacerbates the trade deficit. PM cited an example of the jasmine tea served to the Members of the Parliament.

“This jasmine tea is being imported using the money that comes from the RMA, if we can come up with something even better than this jasmine tea in our own country, it will help the situation a lot,” said PM.