A preliminary assessment based on the severity of the lockdown, with current lockdown categorized as moderate, the economic loss was estimated at around -1.4 percent, said the finance minister Namgay Tshering.
“The gross domestic product (GDP) is estimated to contract from 4.47 percent (baseline estimate) to 3.08 percent due to the current lockdown,” Lyonpo said.
Meanwhile, the finance ministry has estimated the growth for 2021 at 3.67 percent with the expectation of a broad-based recovery from economic sub-sectors, improved trade performance, and continuity in government capital investments.
However, Lyonpo said that the economy would be impacted depending on the magnitude and severity of the restrictions based on the evolving nature of the virus.
“So far, lockdowns of varying duration had been inevitable with growing concern over the safety of our population,” he added.
Lyonpo said that unlike the past two national lockdowns imposed in 2020-21, the recent lockdowns were designed in smart ways to ensure less disruption in the key economic sectors.
“Despite lockdown, industry and construction sectors continued to operate under containment mode, essential services and trade were facilitated, and work from home was activated,” he added.
Lyonpo said that while economic activities slowed down, it did not come to a standstill. As such the impact on the performance of different sectors will be limited.
However, he said that the services sector would be largely impacted, followed by the construction sector and trading sector with the current lockdown.
Lyonpo said that the impact on economic sectors during 2020 far outweighed the impact during the current lockdown. “This is also validated by the steep decline in 2020 GDP figures by around -10.08 percent.”
Earlier, Lyonchhen Dr Lotay Tshering said that Bhutan experienced negative economic growth due to lockdowns in 2020 and that every lockdown contributed -2 to -3 percent in economic growth.
“Economy is man-made and induced mainly because of severe Covid-19 restrictions. As and when we lift the Covid-19 restrictions, the economy curve will slowly shift towards normalization,” Lyonchhen said, adding that the country’s economy would have been comfortably sailing at 6 percent to 7 percent had it not been for Covid-19.
For the fiscal year 2022-23, the finance ministry economic growth die-cast is at 6.3 percent assuming there are no major lockdowns in the country and the ongoing escalation in other parts of the world subsides and improves.
The economic growth measured in the GDP dropped to Nu 171. 57 B, which is -10.08 percent, in 2020 from Nu 178.56 (5.75 percent) in 2019.