The Royal Government of Bhutan (RGoB) has reaffirmed its commitment to achieving strong and resilient economic growth under the 13th Five-Year Plan (FYP). With an ambitious vision of transitioning into a high-income economy by 2034, the government is focused on revitalizing growth in the post-pandemic era.
Finance Minister Lekey Dorji acknowledged the challenges posed by global economic slowdowns, noting that Bhutan’s projected growth rate of 3.3% for 2025 falls below the historical average of 3.7%. However, he expressed optimism about the future, citing major infrastructure projects, including the commissioning of the Puna Hydro Project II (PHP-II) and various new construction initiatives, as key drivers of economic growth.
“The gradual expansion of various sectors is crucial for our economic resilience,” the Minister stated. He emphasized ongoing developments in tourism, mining, and mineral industries, as well as the promotion of cottage and small enterprises, as essential components of Bhutan’s economic strategy. Additionally, state-owned enterprises (SOEs) and advancements in the agriculture sector are expected to play a significant role in driving economic momentum.
Boosting the Agricultural Sector
Recognizing the traditionally low productivity in the agricultural sector, the government has introduced targeted policies to strengthen this critical industry. Among these initiatives is a Price Guarantee Scheme under the Economic Stimulus Plan (ESP), aimed at ensuring price stability for priority crops. Furthermore, a study on the feasibility of an Agriculture and Livestock Insurance Scheme is currently underway to assess its potential benefits for farmers.
Tourism: A Pillar of Economic Growth
Tourism remains a key component of Bhutan’s economy, with the government setting an ambitious target of welcoming 300,000 tourists annually by 2026. Last year, Bhutan achieved nearly 96.5% of its target, attracting 150,000 visitors. This year, the goal is to increase arrivals to approximately 250,000.
To achieve these targets, the government is enhancing marketing strategies and leveraging technology to promote Bhutan as a premier travel destination. These efforts align with broader initiatives to strengthen the tourism sector and ensure sustainable economic benefits.
Attracting Foreign Direct Investment (FDI)
Creating a more favorable investment climate is another key focus area. The government is currently conducting a comprehensive review of existing FDI policies and regulations to foster a more business-friendly environment. These reforms aim to attract greater foreign investment, thereby stimulating economic growth and job creation.
Strategic Investments and Fiscal Reforms
As part of the 13th FYP, the government plans to invest Nu 245 billion in infrastructure development, connectivity enhancement, digital transformation, and workforce skilling programs. Additionally, fiscal reforms are underway to simplify tax structures, making Bhutan’s industries more competitive and creating a conducive environment for business growth.
Finance Minister Lekey Dorji reiterated the government’s commitment to achieving economic resilience and sustainability. He highlighted the importance of collaboration between public and private sectors in driving forward Bhutan’s ambitious economic agenda.
Despite global economic uncertainties, Bhutan remains focused on its long-term vision of becoming a high-income economy by 2034. The outlined strategies and initiatives are expected to bolster economic growth, create employment opportunities, and enhance the overall quality of life for Bhutanese citizens.
Sherab Dorji from Thimphu
