2017年-世界发展银行全球_Bhutan_Economic_Update_September_2017___Hydropower_Sector_Clouds_Macroeconomic_Prospect_9页_300kb

Bhutan Economic Update Summary

Core Content

Bhutan's economy showed solid growth and macroeconomic stability in the first half of 2017, with growth projections for 2018 at 6.9 percent. However, delays in the hydropower sector are expected to negatively affect growth, revenues, and exports in the coming years, prompting a downward revision in growth forecasts. The hydropower sector remains central to Bhutan's economy, contributing significantly to GDP, exports, and government revenues.

Key Economic Sectors

Real Sector

• GDP Growth: The economy grew at 6.5 percent in 2015, with lending data suggesting continued strong growth in 2016 and 2017.
• Lending Trends: Lending to services and tourism increased, while lending to trade and commerce turned negative in November 2016, likely due to the impact of India's demonetization.
• CPI Inflation: The Consumer Price Index (CPI) rose to 4.9 percent (yoy) in June 2017, mainly driven by food price increases, especially vegetables, due to bad weather.
• Exchange Rates: The Bhutanese ngultrum (BTN) has remained stable against the Indian rupee since the second half of 2016 and has been mostly stable against the U.S. dollar. The real effective exchange rate (REER) has also remained stable.

Financial Sector

• Capital Adequacy: The risk-weighted capital adequacy ratio increased from 16.4 percent in March 2016 to 17.8 percent in March 2017.
• Nonperforming Loans: These increased by 1 percentage point to 12.4 percent during the same period.
• Debt Sustainability: The financial sector remains sound, with the most recent debt sustainability analysis indicating a moderate risk of external debt distress.

Fiscal Outlook

• Revenue and Grants: Projected to decline from 28.6 percent of GDP in 2017/18 to 21.6 percent in 2019/20. Domestic revenues are expected to increase in 2018/19 before declining.
• Tax Revenues: Declined from 13.9 percent of GDP in 2015/16 to 11.9 percent in 2019/20 due to reduced excise duty refunds from India.
• Outlays: The outlay to GDP ratio is projected to decline from 34.0 percent in 2016/17 to 25.3 percent in 2019/20. Capital expenditures are expected to drop significantly.
• Fiscal Balance: The fiscal balance is projected to be negative in 2017/18 at -2.5 percent of GDP. The resource gap in the budget is expected to remain at -2.7 percent of GDP unless financing sources are identified.
• Budget Adjustments: The government has revised its capital expenditures to GDP ratio upward to 16.3 percent in 2017/18, reflecting increased spending.

External Sector

• Balance of Payments: The overall balance of payments is more important than the current account for macroeconomic stability. Current account deficits are largely financed by loans from India.
• External Debt: Increased from US $2.3 billion (119% of GDP) in June 2016 to US $2.5 billion (122% of GDP) in March 2017.
• Non-debt Financing: Diversification of exports and increase in non-debt financing are critical. Tourism revenue and remittances have shown positive trends.
• India's GST Impact: The introduction of India's Goods and Services Tax (GST) in July 2017 may lead to trade disruptions and reduced excise duty refunds. However, the impact is expected to be mitigated through government interventions, such as collecting sales tax at the point of sale rather than at the point of entry.

Macroeconomic Projections

• GDP Growth: Revised down to 6.9 percent for 2018 from 11.7 percent. Future growth projections are also reduced due to hydropower delays.
• Inflation: CPI is projected to remain around 5.0 percent in 2018 and 2019.
• Current Account Balance: Improved over time, from -28.3% of GDP in 2014/15 to -8.3% of GDP in 2019/20.
• Fiscal Balance: Projected to be negative in 2018/19 and 2019/20, but with a moderate risk of debt distress.

Hydropower Sector Delays and Risks

• Delays: The Punatsangchhu I and II projects are expected to be delayed by one to two years, which could reduce GDP growth by 3–4 percentage points, exports by US$250–300 million annually, and government revenues by 0.5–1.0 percent of GDP.
• Impact of Delays: The delays are likely to affect economic growth, government revenues, and the repayment capacity of non-hydropower debt.
• Debt Sustainability: Hydropower external debt is considered sustainable due to the 15 percent net return guaranteed by the Government of India. Non-hydropower external debt is also sustainable due to concessional financing and economic growth.

Debt Sustainability Analysis

• Public Debt: As of March 2017, total public debt was 107 percent of GDP, with 99 percent being external debt.
• Debt Composition: Hydropower debt accounts for 77 percent of external debt, primarily financed by India at high interest rates (9–10%).
• Reserves and Maturity: International reserves (US$1.1 billion) are sufficient to cover short-term debt maturities. The average maturity period of external debt is 10.2 years.
• Debt Management: Bhutan has a strong debt management system, with a high score in the World Bank CPIA. The Public Debt Policy 2016 has improved institutional arrangements and defined debt thresholds.

Outlook and Risks

• Downside Risks: Include further delays in hydropower projects, resource gaps in the budget, the impact of India's GST, and natural disasters.
• Mitigation Strategies: The government has introduced measures to counteract the impact of GST, such as adjusting tax collection points. Diversifying exports and increasing non-debt financing are also recommended to reduce reliance on external debt.

Conclusion

While the hydropower sector is a cornerstone of Bhutan's economy, delays in its development pose significant risks to growth and macroeconomic stability. The government has taken steps to mitigate these risks, and the current debt sustainability analysis suggests that Bhutan is not at immediate risk of a debt crisis. However, careful monitoring and strategic management of debt and non-debt financing are essential for long-term economic stability.