Bhutan’s economy has recovered ‘handsomely’ from pandemic-induced disruptions: PM

The country’s economy will grow by 3.5% in 2021, according to Lyonchhen

Prime Minister Dr Lotay Tshering maintained that the country’s economy has recovered handsomely from the pandemic-induced disruptions and expressed hope that the recovery will be sustained and the growth rate of 3.5% to 4% will be restored in 2021-22.

This was what Lyonchhen responded when quizzed by MP Passang Dorji from the Bartsham-Shongphu constituency about the government’s strategies to revive and improve the country’s economy.

According to MP Passang Dorji, amid the Covid-19 pandemic, the Bhutanese economy recorded a growth of negative 10%, which is a 16% drop as compared to a growth of 5% in 2019, as per the national account statistics 2021.

“According to the report, Bhutan’s Gross Domestic Product (GDP) dropped to Nu 171.57bn from Nu 178.56bn in 2019, which is a contraction of Nu 6.99bn. Similarly, the Gross National Income (GNI) of the economy contracted by 7.23%, a drop of 13%,” he said. 

Lyonchhen responded that the data is recorded in the 2020 GDP report, but the country’s economy is to grow by 3.5% in 2021, and the data will be released soon by the National Statistics Bureau (NSB).

Lyonchoen also explained that the country’s economy is import driven and the export of goods has dropped during the pandemic. Almost Nu 48bn worth of goods have been imported and export has dropped to almost Nu 28bn in 2020. 

“In 2021 the export of Nu 24bn worth is the highest drop till date. However, the export has increased to Nu 66bn in the first quarter of this year, indicating that economic activities are happening in the country like the pre-pandemic level,” Lyonchhen said, adding that there are no new exports from the country.

Further, Lyonchhen said, “When the economy drops there is no need to fear because in the country, we don’t have issues in economic fundamentals, and with the ease in the Covid protocol, more economic activities are happening in the country.” 

“The country’s economy will gradually revive and reached the pre-pandemic level now,” Lyonchhen said, adding that within six months after easing the Covid protocols, Bhutan has seen an increased export and imported almost Nu 80bn goods worth in 2021-22.” 

“The flow of goods and services due to economic activities in major economic sectors has increased.” 

Meanwhile, the GDP represents the flow of goods and services due to 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.

According to Lyonchhen, the country has no quality import and export of goods, and most of the imported commodities are petroleum, rice, meat, cereals, and packaged items, among others, that are almost worth Nu 4bn. 

“There are no quality imports that can solve the unemployment issue and boost the economy of the country. The imports are all that deal with edible goods till now. However, it has increased drastically, which indicates the rebounding of the economy,” Lyonchhen said. 

“The country has reached the pre-pandemic level, but needs to improve on the quality of imports. Likewise, exports have increased by 10% compared to previous years.”  

Lyonchhen suggested that the country’s trade deficit has widened because of the increasing imported products.

Kinley Yonten from Thimphu