The Minister, Ministry of Economic Affairs (MoEA) said the economy will do better than the 2.05% GDP growth rate recorded in 2013. Lyonpo Norbu Wangchuk, during the 15th Meet-the-Press session held yesterday in capital, said the confidence on economy is good.
“The GDP growth rate of 2.05% in 2013 is one of the lowest GDP growth rate ever since we recorded GDP in our country in 1980,” Lyonpo Norbu Wangchuk said. He said the GDP growth rate, especially in 1987, when Chukha was commissioned was at 27%.
He said 2011 and 2012 saw GDP of 2.05% with no capital in the market as loan was frozen and there being no economy activity at all in the private sector. Lyonpo added that the fund delay in the construction of PHPA I had also slowed down the economy.
Lyonpo Norbu Wangchuk said the new government, coming in at the beginning of the 11th FYP and within 6 months, has helped to turn around the economy. “We have immediately approved and finalized the 11th FYP, but there was no money and very recently we have paid off the Rupee debt of INR 5.4bn through currency soft arrangement,” the MoEA minister said.
He said that the government injected Nu 1.9bn into the Business Opportunity and Information Centre (BOiC). BOIC has approved 967 projects within 4-5 months. “It will have major impacts, especially in rural economy. And there has been Nu 2nb liquidity injection in financial institutions with which financial institutions will be able to provide loans,” added the minister.
He said that economy will rise with the commissioning of Dagachhu hydro power, the operation of Dungsam cement, and the start of Kholongchhu hydro power project. “The fund for hydro power projects is stabilized and getting fund release on time. Foreign Direct Investment (FDI) proposal are coming in, and 21 domestic companies have registered and Economy Development Policy is under revision, so this is something that will achieve a higher growth rate,” Lyonpo Norbu Wangchuk said.
Prime Minister Tshering Tobgay said that the government is confident of achieving 10% growth rate on average. Lyonchhen added that a new unit will be formed within the Ministry of Finance and Gross National Happiness Commission to continuously monitor the micro economic activities.
“We want small cottage industries in dzongkhags and preferably in all gewogs that will contribute to distribution of income. We are very serious in improving productivity in agricultural sector, tourism, hydro power and small industries,” the PM said.
Regarding the excess liquidity in banks, PM said the Royal Monetary Authority (RMA) has to first inform the government of liquidity being an issue, after which the government will work with RMA to resolve it. Lyonchhen said a fiscal measure, one that will complement the monetary measures, can taken to address a potentially dangerous situation.
Lyonchhen said the government had injected money into the banks to help stimulate the economy, and further said, “The government had injected Nu 2.2bn because there wasn’t enough liquidity. Now if there is an excess liquidity, we will need to discuss with RMA and banks to see if we can remove the liquidity.”