… calls for urgent policy measures

Thukten Zangpo

The employment situation in the country is projected to improve this year, according to the Royal Monetary Authority (RMA). However, it would remain above the pre-pandemic level, with the unemployment rate projected between 4.5 and 5 percent.

This shows Covid-19 pandemic has severely caused the economic downturn in the past three years and is yet to recover fully.

This year’s gross domestic product (GDP) is projected to grow at 4.7 percent.

A lower unemployment rate is indicative of a growing economy, while a higher rate signals an economic decline and challenges in absorbing individuals of working age.

In 2019, the unemployment rate was recorded at 2.7 percent which was equivalent to 8,698 persons unemployed while the GDP was at 5.8 percent.

In 2022, when the economy remained grim recording a GDP of 5.2 percent, overall unemployment reached an all-time high of 5.9 percent and youth unemployment soared to 28.6 percent.

The number of unemployed increased to 18,198 in 2022 from 16,254 in 2021. Youth unemployment was reported at 8,496 in 2022.

According to the RMA, the increase in the unemployed was because of 5,670 students entering the job market compared to 2,976 in 2021. At the same time, the reduced business activity and investment in the economy further deteriorated the labour market situation in the country.

However, the initiation of skills, foreign workers management strategy and reopening of the tourism industry, are expected to have a substantial impact on addressing the unemployment challenges in the near term.

The RMA also stated that the employment situation is anticipated to improve as business and investment activities gain momentum in the economy in the near term.

Given the country’s labour market which is yet to fully recover and an increasing number of graduates, the RMA calls for urgent concrete policy measures to address the unemployment challenges.

The authority stated that an increasing number of graduates from training centres and university students entering the job market was envisaged to further put pressure on youth unemployment.

Despite the agriculture sector absorbing a large portion of employed persons, its contribution to the economic output and productivity remains relatively low.