Bhutan’s Economy Projection for 2017 and 2018

Bhutan is the fastest growing economy in Asia, according to the Asian Development Bank (ADB).

In its Outlook 2017 report released earlier this month, the ADB forecasts Bhutan’s economy to grow 8.2 percent this year and surge to 9.9 percent in 2018.

Growth quickened in fiscal year 2016 on increasing construction and investment. Inflation fell to a new low, and foreign exchange reserves strengthened.

The growth acceleration is attributed to expanded investment in hydropower for export, provided the Mangdechhu hydropower plant commissions as planned.

“Mainly this forecast growth rate is based on the assumption that there will be a lot of activity investment projects in Bhutan this year and coming years. So, this activity of supply side investment going on in the country will boost the economy in the country and the inflation rate in the next few years is expected to be lower,” said the Country Director, Bhutan Resident Mission of ADB, Kanokpan Lao-Araya.

The report also states that last year’s demonetisation in India will have no lasting impact in Bhutan and that earnings from the tourism sector will rise after it hit a 9% decline in dollar earnings following the earthquakes in Nepal in April 2015.

With Bhutan’s largest hydropower plants, Punatsangchhu I and II expected to be commissioned in a few years time, Bhutan may well be looking at a brighter economic future.

Bhutan’s Economy Projection for 2017 and 2018 Source: BBS

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