Thukten Zangpo
Bhutan’s economy recorded a growth of 4.88 percent last year, down from 5.21 percent in 2022, according to the National Statistics Bureau’s (NSB) National Accounts Statistics 2024 report released yesterday.
The growth of the economy was mainly fuelled by the growth in the service sector.
The gross domestic product (GDP) was recorded at Nu 249.39 billion (USD 3.02 billion) last year compared to Nu 227.81 billion (USD 2.9 billion) in 2022 respectively.
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 use, 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.
The increase in GDP is an indication of the economy growing and businesses expanding, which enhances people’s spending power. GDP measures the overall strength of an economy.
The tertiary sector – the main contributors to the GDP – recorded the highest share at 55.49 percent, followed by the secondary sector at 29.55 percent. The primary sector also showed resilience with a modest growth rate of 14.96 percent.
The service sector recorded a significant growth, mainly contributed by hotels and restaurants with 50.64 percent, followed by mining and quarrying by 36.96 percent, and finance and insurance by 13.42 percent.
The growth in the service sector was largely attributed to tourism and its related industries. These shifts indicate the growing prominence of the services sector in the economy, the report stated.
The primary sector experienced a growth of 1.37 percent after recording a negative growth of -1.15 percent in 2022. This was primarily due to better performance in the livestock and forestry sub-sectors.
The agriculture (crops) sub-sector observed a negative growth of -1.95 percent compared to the previous year. The total gross value added (GVA) of the primary sector in 2023 was Nu 37.31 billion in 2023.
In the secondary sector, it recorded a negative growth of -0.03 percent in 2023, a contraction of 5.63 percentage points as compared to 5.6 percent in the previous year. This sector saw a negative contribution to the overall GDP growth by -0.01 percentage points. The construction and electricity sub-sectors were main contributors for the overall drop.
The total GVA of the secondary sector was estimated at Nu 73.7 billion.
The tertiary sector saw a growth of 8.61 percent last year, up from 6.62 percent in the previous year, recording an increase of 1.99 percentage points.
The service sector made a substantial contribution to the overall GDP growth by 4.71 percentage points in 2023. The sector recorded a GVA of Nu 138.37 billion in 2023.
The report states that the final consumption expenditure grew by 5.78 percent. Both the household final consumption expenditure and government final consumption increased by 7.61 percent and 1.41 percent, respectively.
The gross national savings (government and private savings) increased to Nu 49.13 billion from Nu 48.36 billion last year.
Government savings recorded a deficit of Nu -9.56 billion while private savings (including households, private, and public corporations) amounted to Nu 58.69 billion.
The export of goods and services increased by 30.68 percent while import of goods and services decreased by 0.61 percent.
At the same time, the gross national income (GNI) decreased to 4.54 percent in 2023 (Nu 235.66 billion), down from 5.73 percent in 2022. In 2022, the GNI was recorded at Nu 215.98 billion.
The GDP per capita increased to Nu 323, 764.71 or USD 3,919.55 from Nu 301.29 or USD 3,833.03.