IN­TERIM BUD­GET LIKELY TO AF­FECT BHUTAN’S GDP GROWTH

Business Bhutan - - Business -

The In­ter­na­tional Mon­e­tary Fund’s ar­ti­cle IV con­sul­ta­tion re­port states that the coun­try’s GDP growth is pro­jected to de­cel­er­ate to 4.8 per­cent in 2019 fis­cal year,

The growth, ac­cord­ing to the re­port, re­flects a sharp de­cline in pub­lic in­vest­ment as the 2019 in­terim bud­get im­plies a sharp fis­cal with­drawal. How­ever, the re­port states that growth would be mod­er­ated with the com­ing on stream of the Mangdechhu hy­dropower plant to about six per­cent in the 2019-2020 fis­cal year. This is pro­jected to fur­ther ac­cel­er­ate in 2021–22 fis­cal year due to the re­port­edly ex­pected com­ing on stream of two other mega hy­dropower projects.

Given Bhutan’s in­fras­truc­ture needs, the IMF has also called for higher cap­i­tal ex­pen­di­ture sup­ported by ad­di­tional do­mes­tic rev­enue and a mod­est in­crease in do­mes­tic fi­nanc­ing.

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