However, the country’s economy grew by only 4.6 percent, one of the slowest in recent years
Despite recording a sharp fall in growth rate, the tertiary sector’s performance at the broad aggregate level for the year 2012 has been much better than the primary and secondary sectors.
Recent reports published by the National Statistic Bureau (NSB) revealed that the country’s gross domestic products (GDP) in constant prices recorded a growth rate of 4.62 percent over the last two years. The GDP was Nu 49,318.48mn in 2011 which heightened to Nu 51,597mn last year.
The tertiary sector contributed a total value addition of Nu 43,474.38mn at current prices. The sector which consists of businesses such as hotels, restaurants, wholesale and retail trade, transport, storage, communications, finance, insurance, real estates, general government, and other private and recreational services among others noted a growth of 16.77 percent at current prices. However, the sector’s share to GDP remained more or less the same as 2011 at 43 percent.
Meanwhile, the primary and secondary sectors represented 16.9 percent and 39.30 percent of the total GDP respectively.
On the other hand, the economy grew by 4.6 percent last year, one of the slowest in recent years, because of a liquidity crunch in the market, and a consequent decrease in the level of investment within the economy. In 2011, the economy grew by 8.51 percent and by 11.6 percent in 2010.
The hotel and restaurant sector registered more growth, but since it carried lower weightage, it did not have much impact in the overall calculation of GDP.
Investment in the construction sector was around Nu 15.8bn in 2012 as compared to Nu 1.3bn in hotels and restaurants.
The NSB measures gross domestic product using the expenditure and production method, therefore, less expenditure in the economy translates to lower rate of growth.
The fall in growth last year was attributed mainly to a slowdown in the construction sector, after the restrictions on housing loans from commercial banks, following the central bank’s notification in March 2012.
Growth in the construction sector in 2012 was recorded at 4 percent. In previous years, the sector on an average grew by 14 percent annually. The slowdown in the construction sector had a significant impact in the overall calculation of GDP, because investment in this sector is relatively huge.
The government said that the economy, on an average, grew at around 8 percent annually and at the same time, the economy was mired in a severe liquidity crunch. Therefore, the country’s GDP calculation did not provide a true picture of the economy.
In nominal terms or at current prices, which includes inflation, the total size of GDP grew by Nu 12bn from Nu 86bn in 2011 to Nu 99bn in 2012. Bhutan’s GDP per capita was recorded at Nu 138,132.01, taking into account the country’s projected population of 0.72mn last year.
Inflation rate was recorded at 10.9 percent during the year as compared to 8.86 percent in 2011.