The country’s economy recorded the highest growth of 7.99 percent last year after having witnessed one of the lowest growths in 2013.
The economy continued to perform better compared with a growth of 5.7 percent in 2014 and 6.6 percent in 2015. Consequently, the country’s GDP or the size of the economy expanded from Nu 132B to Nu 148.67B.
Construction, communication and transport are the main drivers of the growth in addition to increased investment in machinery and equipment. According to the national accounts statistics, sustained growth in government spending and improved trade deficit propelled economic growth in 2016.
The GDP per capita in 2016 increased to Nu 193,447 (US $ 2,879) from Nu 174,479 (US$ 2,720) in 2015.
The per capita income saw a growth of 7.02 percent in 2016 compared with 2.69 percent growth in 2015, up by 4.33 percent. In nominal terms, the gross national income per capita amounted to Nu 177,394 (US$ 2,640) in 2016.
GDP is a measure of production, income and expenditure. It broadly determines how much a country can produce, generate income, consume and save. It represents the aggregated final results of the production activities of all the economic institutions located within the economic boundary of a country in a year.
Around 42 percent or nearly half of the economy is driven by service sector.
The primary sector’s share to GDP is 16.5 percent. However, the sector’s growth slowed to 3.65 percent in 2016 from 5.07 percent in 2015. The lower rate of growth, according to the national accounts statistics, can be attributed to non-performance in the forestry sector.
Within the primary sector, agriculture (crops) remains the main driver with a growth of 6.5 percent. The forestry and mining sector recorded negative growth.
After a long and sluggish growth, crops recorded value addition of Nu 14B due to increased production of potato, chilli, and paddy.
With the huge growth in cattle population and improved breed, livestock sector saw a growth of 6.42 percent compared with negative growth of 23.06 percent in the previous year.
In the secondary sector, the industries saw growth of 6.79 percent in 2016, 1.43 percent down from 8.22 percent in 2015. Within the sector, construction sector was the driver of growth with 13.31 percent compared with 10.60 percent in 2015. The secondary sector’s contribution to GDP stands at 41.46 percent, an increase of 0.11 percent.
The construction sector, however, constituted 34.50 percent government construction and 65.50 percent private and public corporations construction. In 2016, government construction recorded higher growth than the private construction.
The growth of the service sector hit 10.48 percent in 2016 from 5.45 percent in the previous year. Transport and finance sectors were the main contributors to the sector’s growth.
Wholesale and retail trade sector (Trade and Repair of Motor Vehicles, Motorcycle, Personal and Household Appliances) growth slowed to 10.59 percent in 2016 from 12.72 percent in 2015. This sector recorded a growth of 11.01 percent compared with 13.54 percent in 2015, down by 2.53 percentage points.
On the other hand, repair of motor vehicles, motorcycle, personal, and household appliances recorded growth of 12.11 percent in 2016 from 8.03 percent growth in 2015.
According to the report, performance of the hotel and restaurant sector is mainly contingent on the number of tourist arrivals in the country. In 2016, the number of dollar paying tourist arrival in the country increased by 6.16 percent. With the increased inflow of tourists, the sector recorded a growth of 9.90 percent in 2016.
“Despite strong growth, the size of the sector still remained relatively small in the economy with its share of GDP at 1.90 percent in 2016 and 1.88 percent in the previous year,” the report stated.
Transport, storage and communication sector recorded 11.20 percent growth in 2016 from 8.80 percent in 2015. Major contributions came from sub-sectors such as communication with growth of 18.72 percent and air transport with a growth of 63.38 percent in 2016.
The size of finance, insurance, real estate, and other business services increased to Nu 10.89B in 2016 from Nu 9.74B in 2015.
Within the service sector, finance, insurance, and real estate observed significant growth of 11.20 percent in 2016 compared with 8.80 percent in the previous year. The growth of the sector in 2016 was the highest since 2013.