GDP growth of 2.05 per­cent is un­ac­cept­able for a small coun­try like ours, says PM

Bhutan Times - - Home - Sonam Pen­jor

The econ­omy of our coun­try for the year 2013 has grown by 2.05 per­cent of GDP as com­pared to 5.07 per­cent of the GDP of the pre­vi­ous year. The growth has slowed down by about 3 per­cent­age point. How­ever, the av­er­age growth in the last five years showed at 6.7 per­cent.

The de­cline in the growth was at­trib­uted by some sec­tors which showed a neg­a­tive growth to the ex­tent of 8 per­cent.

Dur­ing the 13th meet the press ses­sion last Fri­day, Ly­onch­hen Tsh­er­ing Tob­gay said, the Gross Do­mes­tic Prod­uct (GDP) growth of 2.05 per­cent is un­ac­cept­able for a small coun­try like ours and that too com­pounded with se­ri­ous fis­cal prob­lems, ru­pee is­sues and for­eign cur­rency is­sues.

Ly­onch­hen Tsh­er­ing Tob­gay said that the main­te­nance of the ru­pee short­age is be­cause of the ad­min­is­tra­tion and poor man­age­ment of mon­e­tary and fis­cal pol­icy. He fur­ther added that the growth rate has been de­clin­ing and a se­ries of prob­lems over the past few years which have ex­pressed them­selves at this dec­i­mal growth rate in 2013.

The gov­ern­ment has taken cor­rec­tive ac­tions, opened up trade and also ex­er­cis­ing fis­cal dis­ci­pline and en­sur­ing that mon­e­tary pol­icy is rea­son­able. This is why though we have opened up trade in ar­eas that has been closed, the ru­pee sit­u­a­tion has im­proved, said the Ly­onch­hen.

He fur­ther men­tioned that we have a ru­pee sur­plus, and we have suf­fi­cient for­eign cur­rency re­serves that are grow­ing to make mat­ters bet­ter and we have large amounts of projects at hand.

How­ever, Ly­onch­hen said that th­ese fig­ures would mis­lead, be­cause the cur­rent ru­pee re­serve is as­so­ci­ated with the money from the eco­nomic stim­u­lus plan (ESP) and for the hy­dropower projects con­struc­tion.

For the con­struc­tion sec­tor, Ly­onch­hen said that a loan in 11th FYP is es­ti­mated at Nu 100bn, so there are lots that can strengthen our econ­omy but go­ing back to work, are we go­ing to work hard, there are lots of hy­dropower projects on line, lots of other in­fra­struc­ture works, whether schools, roads, farm roads or the geog roads that are go­ing to be con­structed.

While gov­ern­ment is em­pha­siz­ing for the self suf­fi­ciency, Ly­onch­hen said that gov­ern­ment is giv­ing lot of em­pha­size on agri­cul­ture pro­duc­tiv­ity and gov­ern­ment hope to in­crease do­mes­tic pro­duc­tiv­ity, re­place the need of im­ported goods and will in­crease the ex­ports out­side the coun­try.

He fur­ther men­tioned that in that way, Bhutan can have growth and a healthy cur­rent ac­count sit­u­a­tion. We can have growth and not have to deal with ru­pee cri­sis and that was the sit­u­a­tion un­til a few years ago.

Ly­onch­hen said that gov­ern­ment has tar­geted at 10 per­cent on av­er­age and growth with­out ex­ces­sive pres­sure on mon­e­tary sys­tem.

The only way to en­sure the route is by in­creas­ing the pro­duc­tiv­ity within the coun­try, Ly­onch­hen said that five jew­els has been iden­ti­fied, for in­stance hy­dropower, agri­cul­ture and man­u­fac­tur­ing, business and min­er­als, tourism for the growth of the econ­omy.

Mean­while, ac­cord­ing to the Ly­onch­hen a for­eign cur­rency re­serve as of 30th Septem­ber 2014, was at US $ 879 mn and as of 30th June, 2013 it was at US$721mn and there has been in­crease by Nu.158 mn.

He fur­ther men­tioned that about ru­pee re­serve, as of 30th June 2013, ru­pee re­serves have been 5.93 bn and to­day as of 30th Septem­ber, 2014 it was 14.29 bn. He said that it has risen up by 8.36bn.

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