… largely because of good performance in hotels and restaurants, construction, and wholesale and retail businesses 

Thukten Zangpo 

Bhutan’s economy recorded a growth of 5.21 percent last year from 4.42 percent in 2021 in the previous year, mainly attributed to better performance in hotels and restaurants, construction, and wholesale and retail trade.

This is according to the National Statistics Bureau’s (NSB) National Accounts Statistics 2023 released yesterday. 

The country’s economy or gross domestic product (GDP) grew by Nu 23.15 billion (B), which is a gain of 0.79 percentage points compared to a year ago. 

The GDP was recorded at Nu 227.81B and Nu 204.66B in 2022 and 2021 respectively. 

However, the economic growth at 5.21 percent in 2022 was higher than the finance ministry’s projection at 4.7 percent. 

According to the NSB, the GDP represents the flow of goods and services because of economic activities that take place in the economy. It is the sum of the values of all goods and services produced within the economic boundary of the country, which is available for final uses such as consumption, investment, and exports.

A shrinking of GDP results in loss of jobs, decrease in people’s income levels, and consumption capacity. It also means lower profits for companies, including government and corporations. 

When GDP goes up, the economy is growing; people are spending more and businesses are expanding. GDP measures the overall strength of an economy. 

The main contributors to the GDP, hotels and restaurants, construction, and wholesale and retail trade saw a growth of 31.58 percent, 16.45 percent, and 14.35 percent respectively. 

However, the agriculture output especially crops cultivation, mining and quarrying saw a decline by -4 percent and -3.02 percent respectively. Another major contributor to the GDP, electricity also experienced a drop of -1.14 percent from the previous year. 

The service sector contributed 53.5 percent, industry at 31.82 percent and agriculture sector 14.67 percent to the GDP in 2022. 

The report also added that the private final consumption expenditure government and final consumption expenditure were also main contributors in 2022, with the growth of 5.55 percent and decline of -2.32 percent respectively.

The finance ministry projected the economic growth rate of 4.2 percent this year and 5.2 percent next year. 

The Asian Development Bank had downgraded Bhutan’s economic growth forecast by 0.3 percentage points, projecting a growth rate of 4.3 percent this year. This was mainly because of decrease in the hydropower production in the first four months of this year and credit suspension for the construction sector.

The report also added that the gross national savings (government and private savings) saw an increase by 10 percent in 2022 from the previous year.  The gross national savings was Nu 53.73B in 2022 against Nu 48.88B in 2021. This was an increase of Nu 4.85B.

Despite the increase in national savings, the report stated that the domestic investment demand could not cover the national savings resulting in a savings investment gap of Nu 70.84B.

Export of goods and services declined by -8.1 percent while, import of goods and services increased by 17.14 percent in 2022. 

At the same time, the country’s gross national income saw an increase by 5.73 percent to Nu 215.98B.  

The GDP per capita increased to Nu 301.29B or USD 3,833, an increase of Nu 30.62 million (M) or USD 172.31M from the previous year.