Unemployment rate expected to plunge to 2% in 2023-24

The Country’s labour market is improving with the resuming of economic activities, according to labor minister Karma Dorji

The labour market in the country has been improving consistently since the second half of 2021 and the momentum is expected to continue. The unemployment rate is expected to drop to 3.5% this year and around 2% in 2023-24.

This is according to the minister of Labour and Human Resources, Karma Dorji.

Lyonpo said that the unemployment rate was 4.8% in 2021, which was when we couldn’t resume economic activities in the country. “Now, the foreign workers have been also imported, which will contribute to economic development activities.”

Lyonpo added that now the country is progressing and improving, economic activities have resumed and some sectors are picking up, the entire ecosystem will become stable.

“Bhutanese who have returned from overseas and lay-off an employee in the tourism sector due to the pandemic was the reason for the unemployment rate hitting 5% in 2020,” Lyonpo said.

However, as per scientific research, the unemployment rate must be 3% for the country to have a good economy. Currently, the unemployment rate is 4.8% in the country.

“It is expected to decline further as bigger sectors like tourism are opening up,” Lyonpo said.

In addition, the minister also shared that many people are moving to Australia, which is also attributable to the unemployment rate improving slightly, but economic activities within the country may suffer as working people leave.

“We cannot wholly say that employment opportunities will be vast here as people are leaving Australia because many people who are leaving, are civil servants and it will be difficult to fill the civil servant position,” Lyonpo said.

Meanwhile, when asked about the ministry’s plan to stop Bhutanese from going abroad as economic activities will be affected, Lyonpo said that people are getting better pay and opportunities in Australia.

“Our country is a developing country and Australia is a developed country, there is no way we can afford to pay, so there will always be a gap,” Lyonpo said.

According to Lyonpo as a motivator for the ministry to improve the situation, the ministry is trying to match it by providing US dollars 600-700, if people get USD 1000 outside.

“I think, we will never be able to match how much it is paid there,” Lyonpo said.

Lyonpo added that it will be difficult for the government to do it immediately, but if we look at the changes that are taking place, the government is moving in that direction.

“That is why, a lot of transformation is taking place, be it increased sustainable development fee (SDF) for tourists, or making civil service more efficient and compact, it will result in some savings and improved service delivery which means the economy will do well,” Lyonpo shared.

According to some economists, the key driver for a strong 2022 growth over 2021 is the boost to activities on the back of the economic reopening following the country’s virus containment measures.

“We expect strong private consumption and investment in the country this year.”

Tshering Pelden from Thimphu