Economy to grow by 9.8% in 11th plan

The rupee task force report has also plotted the macro-economic (national economy) outlook for the Bhutanese economy.

The report claims that in the 11th five year plan (FYP) Bhutan will grow at an average of 9.8% and about 15% by the first year of the 12th plan in 2019-2020. The report says that this growth is mainly triggered by the industry sector, particularly the hydropower sector, contributing about 56% and the share of agriculture sector will decline to 6.6% by end of FY 2019/20. Within the industry sector, the electricity alone contributes about 63%.

GDP grew at 7.9% in FY 2010/11 and it is expected to grow at 10.73% by the end of the 10FYP. The industry sector contributed about 43.9% followed by service sector 38.6% and agriculture sector contributing about 13.4%. The share of agriculture sector declined from 15.0% to 14.1% in FY 2010/11.


Inflation and Unemployment

Inflation varied between 2.06% to 6.33% during the 9FYP and rose to 7.04% in the beginning of the 10FYP. The report says that although inflation has been contained within 6-7% during the past few years, the persistent high inflation in India may exert pressure on the local prices. The inflation in FY 2010/11 was 8.56% but it is expected to decline to 4% at the end of 10 FYP as the aggregate demand will contract with the winding up of the 10FYP.

The unemployment rate reached 3.7% by the end of the 9FYP. It peaked at 4% in the beginning of 10FYP and has since decreased to 3.1% with the Government targeting to achieve the unemployment rate at less than 2.5% by the end of the 10FYP.



The report says that the total revenue including grants during the 10FYP on an average grew to 38% of GDP as compared to 32% in the 9FYP. It says the high revenue growth is mainly driven by coming on stream of hydropower projects. The revenue from hydropower projects grew at an average of 14.1% of GDP in the 10FYP and is projected to decline to 11.7% of GDP in the initial years of the 11FYP.

Total expenditure is estimated to be about 40% of GDP in the 10FYP. This the report says may reduce to 26% of GDP in the 11FYP if the present thinking to keep capital spending at 10FYP levels is adopted and the new plan is considered as the period of consolidation rather than more expansion of development activities. It is projected that the fiscal deficit will be around 2% of GDP in the 10FYP and less than 1% in the 11FYP.

According to the report, the total external debt is projected to rise to 87.7% of GDP by the end of the 10FYP and to 170% of GDP by the end of 11FYP. It declines slightly to 167% of GDP by 2019/20, of which hydropower debt will constitute about 90%.

Check Also

“Cannot compromise in Education”: New Education Minister Dimple Thapa

During the result declaration of classes 6 and 10 on 2nd February, all the media …

Leave a Reply

Your email address will not be published. Required fields are marked *