The Bhutanese Leading the way.
Bhutan’s gross savings in 2016 was Nu 47.1 billion, an increase of Nu 19.2 billion from the previous year according to data maintained by the national statistics bureau.
Of the total, private savings (Households, Private and Public Corporations) constituted Nu.43.02 billion and government saving constituted Nu. 4.1billion.
The drop in final consumption expenditure by 1.09 percent and favourable net inflow of primary income and current transfer from abroad led to the big increase in national saving.
But this huge growth in national savings was not sufficient to finance the required investment demand in the economy.
In 2016, the economy recorded an Investment of Nu. 81.81 billion, an increase by Nu 10.52 billion from 2015. Investment recorded a growth of 11.97 percent in 2016 as compared to the growth of 16.48 percent in 2015.
The Saving-Investment (SI) ratio for the economy was recorded at 0.58 in 2016, an increase of 0.19 from 0.39 in 2015.
The final consumption expenditure (FCE) recorded a negative growth of 1.09 percent in 2016 after a positive growth of 10.13 percent in 2015. Even with the drop, the FCE in nominal terms was recorded at Nu. 100.73 billion, which is 67.75 percent of the GDP in 2016. It is drop by 6.78 percentage points as compared to 2015.
The Household Final Consumption Expenditure (HFCE) accounted for 75.12 percent of the FCE last year. It observed a negative growth of 2.60 percent against the growth of 9.94 percent in 2015. Household expenditure was estimated at Nu 75.7B, which is about 5.87 percent of the GDP.
Likewise, Government Final Consumption Expenditure (GFCE) accounted for 24.88 percent of the total FCE. constituting Nu 25.06 billion last year. The share of the GFCE to GDP was estimated at 16.86 percent from 17.77 percent in 2015.
The GFCE slowed from a growth of 10.80 percent in 2015 to 4.21 percent in 2016. The slowdown in the GFCE expenditure growth was mainly due to reduction in expenditure on maintenance of property such as equipment, and other operating expenses of the government.
The national savings is important as it is also an indicator of the health of the economy.
With the rupee crisis of 2012-13 the savings rate plummeted by around Nu 21 bn between 2012 and 2013 at the time.
