Govt. must earnestly focus on economic and private sector recovery measures – Opposition

Added efforts and focus need to be given to streamlining and augmenting exports, says the Opposition

With the transition into a new phase of the Covid-19 pandemic management, the Opposition Party (Druk Phuensum Tshogpa or DPT) maintained that it has become extremely urgent and important to pave a way for rebounding and revival of the economy in 2023 and beyond. 

In doing so, the Opposition specifically advised the government to prioritize agriculture, construction, hydropower, tourism and hospitality, small, medium and cottage industries, manufacturing and mining sectors.

Through a press release issued yesterday evening, it stated that added efforts and focus need to be given to streamlining and augmenting exports.

“We also strongly suggest the government to work on some concrete and serious fiscal and financial measures, both budgetary and taxation matters, and submit to the parliament. It should also work closely with the central bank on monetary and credit measures,” states the party. 

“Otherwise, any talk of optimistic economic projections will simply be rhetoric and wishful thinking, while the actual recovery of the economy may take much longer if concrete appropriate measures are not taken timely,” it added. 

Anchored to two overarching goals of employment and revenue generation, according to the Opposition, the government must hence immediately accord the highest priority to economic recovery and private sector revival measures.

“We are all only too aware that the pandemic has seriously disrupted the economy,” states the press release.

Sharing some vital statistics, which the Opposition stated are clearly indicative of the bad state of the economy, it goes on to state economic growth rate has fallen by 15.84% in 2020 from 5.76% in 2019 to negative 10.08% in 2020, and that the Per Capita Income has fallen by US$ 288.97 from US$ 3,418.83 in 2019 to US$ 3,129.86 in 2020.

“In fact, our per capita income has fallen below 2017 level by US$202.70,” the DPT stated.

According to the Opposition, the GDP has fallen by Nu 7bn from Nu 178bn in 2019 to Nu 171bn in 2020 and Youth Unemployment has aggravated from 11.90% in 2019 to 22.60% in 2020.

It is also stated that actual domestic revenue in 2019-2020 fell short by Nu 7.08bn from the original estimates for the fiscal year; and that domestic revenue is projected to fall by Nu 2,938mn, from Nu 36,218.876 in 2019/2020 to Nu 33,281.000 in 2020-2021 fiscal years.

“But given the experience of the actual outcome of 2019-2020 fiscal year, the actual shortfall could be far worse,” states the party.

Further, the Opposition said that fiscal deficit for 2021-2022 is projected at negative 8.59% of the GDP (which is beyond acceptable threshold, and is deeply worrying), and the total resources (including grants and others) is projected to fall by 11.3bn, from Nu 56,765.582mn in 2021-2022 to Nu 45,465.545mn in 2022-2023.

The DPT also stated that there has been a -90% contractions in the tourism sector, -81.84% contractions in the mining and quarrying sector, -73.46% contractions in Hotel and Restaurants, — 20.76% in Manufacturing, and -20.64% in Construction.

The contractions in the following sectors are reflective of the health of the private sector, according to the DPT.

“However, due to more lockdowns in 2020 and 2021, the indicators for 2021 could be even worse, and not much optimistic for 2022 either,” states the press release.

According to the Opposition, it remains always ready to render their full support to the government toward this end.

Staff Reporter from Thimphu