A recent report from the National Statistical Bureau (NSB) sheds light on Bhutan’s economic landscape for the year 2022, unveiling substantial shifts in the nation’s financial dynamics. Notably, the report highlights a significant upswing in gross national savings, signifying a transformative period within the kingdom’s economy.
The report’s figures unveil that in 2022, Bhutan’s economy achieved a remarkable gross national savings of Nu 53,734.83 million, marking a substantial increase of Nu 4,853.16 million compared to the previous year’s figure of Nu 48,881.67 million in 2021. This surge in savings represents a promising development for the nation.
However, within this realm of financial reserves, a dichotomy becomes apparent. While private savings, encompassing households, private enterprises, and public corporations, soared impressively to Nu 60,785.97 million, government savings witnessed a deficit, standing at Nu 7,051.14 million. This contrast reveals noteworthy differences in fiscal strategies between the public and private sectors.
Furthermore, despite the commendable rise in national savings, the report portrays an economy that struggled to fully meet its domestic investment demands. The saving-investment gap for 2022 surged to an alarming Nu 70,836.08 million.
In contrast, the nominal investment for the same year was estimated at Nu 127,071.82 million, displaying a significant disparity when compared to the gross national savings of Nu 48,361.04 million recorded in 2020.
In real terms, the investment sector displayed a growth rate of 9.93% in 2022, a notable contrast to the 15.89% growth witnessed in the preceding year, representing a 5.96% point decline in growth.
This economic report further underscores the shifting dynamics of Bhutan’s financial landscape, indicating that in 2022, national savings were able to finance 53% of domestic investment, a percentage point higher than the previous year.
Moreover, the report emphasizes that Bhutan’s economy finds itself at a pivotal juncture, highlighting the imperative need for prudent fiscal planning to bridge the saving-investment gap and ensure the nation’s economic stability amidst evolving financial dynamics.
In another recent report, Bhutan’s economy, with an estimated gross domestic product (GDP) size of Nu 227.813 billion, registered a growth rate of 5.21% in 2022, marking a 0.79% increase from the 4.42% growth observed in 2021.
This upswing in economic growth is attributed to significant growth in various sectors, including hotels and restaurants (31.58%), construction (16.45%), wholesale and retail trade (14.35%), and professional, administrative, and support services (13.99%), among others.
However, the report notes declines in sectors such as agriculture (crops), mining and quarrying, and electricity, with contractions of -4.00%, -3.02%, and -1.14%, respectively.
On the demand side of the economy, final consumption expenditure showed a growth of 3.10%. Notably, household final consumption expenditure contributed significantly with a growth rate of 5.55%, while government final consumption witnessed a decline of -2.32%.
Gross domestic capital formation exhibited robust growth, increasing by 28.84%, a notable improvement compared to the growth rate of 19.96% in 2021. However, there was a decline in the export of goods and services, dropping by -8.10%, while the import of goods and services saw a significant increase of 17.14% in 2022.
The accelerated growth in investment, coupled with a slower increase in national savings, has resulted in a decline in the saving-investment (SI) ratio, which fell to 0.53 in 2022 compared to 0.62 in 2021.
Nidup Lhamo from Thimphu
