Bhutan Development Update, March 2020
Growth in Bhutan is estimated to have remained subdued in 2018-19 as hydropower production declined further. Inflation decelerated to its lowest level in 2018-19 since 2003, reflecting a rapid decline in food prices. Growth in bank lending to the p...
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| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/746771583997797516/Bhutan-Development-Update http://hdl.handle.net/10986/33450 |
| Summary: | Growth in Bhutan is estimated to have
remained subdued in 2018-19 as hydropower production
declined further. Inflation decelerated to its lowest level
in 2018-19 since 2003, reflecting a rapid decline in food
prices. Growth in bank lending to the private sector
remained strong in 2018-19 (16.7 percent, YoY) but risks to
the financial sector are on the increase. The current
account deficit (CAD) widened in 2018-19 on the back of
lower electricity and tourism receipts. The fiscal balance
improved in 2018-19 due to a sharp decline in capital
spending. Risks to the outlook arise primarily from delays
in the completion of the remaining large hydro projects,
volatile hydropower revenues, and slippages in the
implementation of non-hydro revenue measures. Bhutan faces
two key challenges: making growth more inclusive and less
reliant on hydropower. Therefore, Bhutan needs to facilitate
more private-sector-led growth to increase employment
opportunities and domestic revenues. While Bhutan achieved
great strides in poverty alleviation, the pace of progress
in shared prosperity has slowed in recent years. Also,
disparities in poverty and other development outcomes across
districts persist. |
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