2015年-世界发展银行全球_Bhutan_Development_Update_April_2015_13页_739kb

Bhutan Development Update Summary

Core Content

This document provides an overview of Bhutan's macroeconomic and fiscal developments in 2014 and the outlook for 2015 and beyond. It highlights the economic rebound following the removal of restrictions on credit and imports, the expansion of the tourism sector, and the resumption of hydropower investment. It also addresses the challenges and risks associated with Bhutan's reliance on donor finance and the need for private sector development and asset diversification.

Main Drivers of Growth in 2014

• Lifting of Restrictions: Administrative restrictions on foreign exchange access and credit were lifted in July and August 2014, leading to a rebound in GDP growth to 5.7 percent.
• Hydropower Projects: The resumption of hydropower construction, particularly under the Inter-Governmental (IG) model with India, significantly boosted the construction and services sectors.
• Five-Year Plan Implementation: Full implementation of the five-year plan contributed to economic growth.
• Tourism Expansion: A record number of tourists visited Bhutan in 2014, especially from Thailand, leading to a 15 percent increase in tourism revenues.

Economic Indicators

• GDP Growth: 5.7% in 2014, projected to increase to 6.9% in 2015.
• Inflation: Consumer price inflation slowed to 6.3% in January 2015, down from 11.3% at the end of 2013.
• Employment and Poverty: Youth unemployment reached 9.9%, and the poverty headcount rate based on PPP $2.5/day was projected to be 18.9% in 2016.
• Fiscal Deficit: Projected at 2.2% of GDP in FY14/15, with domestic revenues declining from 22% to 19.9% of GDP.
• Current Account Deficit: Estimated at 29% of GDP in 2014/15, with hydropower contributing a third of the deficit.

Hydropower Development

• Capacity and Projects: Bhutan has 1,606 MW of installed capacity and is expected to add 3,153 MW in 2018. Major projects include Punatsangchhu I and II, and Mangdichhu, all under the IG model with India.
• Revenue and Exports: Hydropower exports account for a significant portion of Bhutan's export earnings, with India being the main buyer. Exports are expected to triple by 2021.
• Debt and Financing: Hydropower projects are primarily financed by India, with a mix of loans (70%) and grants (30%). Public and publicly-guaranteed external debt stood at 95% of GDP in 2014.

Fiscal and Monetary Management

• Fiscal Coverage: Domestic revenues cover 63% of public spending in FY14/15, below the 85% target by the end of the Five-Year Plan.
• Monetary Policy: The RMA introduced prudential measures to manage credit expansion and prevent another rupee shortage.
• Credit Trends: Private credit growth in 2014 was 9.4%, a significant drop from previous years. Lending is concentrated in personal and real estate loans.

Challenges and Risks

• Debt Vulnerability: While the risk of external debt distress remains moderate, the rapid accumulation of debt is a concern.
• Private Investment: Private investment has contracted in real terms, and the investment climate needs improvement.
• Employment and Informality: High youth unemployment and informality in the labor market are persistent issues.
• Reserves and Currency Mismatch: Bhutan's international reserves have increased, but there is a mismatch between reserve composition and international transactions, with a significant portion held in Indian rupees.

Outlook

• GDP Growth: Expected to grow at 6.9% in 2015, driven by hydropower and tourism, with slower growth projected in 2016 and 2017 before new hydropower projects boost growth from late 2018.
• Poverty Reduction: Poverty is expected to decline further, at an average of 2.1 percentage points per year between 2014 and 2016.
• Current Account Deficit: Expected to continue growing due to hydropower construction, but remain stable outside the hydropower sector.
• Fiscal Balance: Fiscal accounts are assumed to remain in balance, supported by donor grants and controlled spending.

Financial Sector Development

• BOIC: The Business Opportunity and Information Center (BOIC) was established in 2014 to support SMEs and informal rural activities with a revolving fund of Nu 1.9 billion.
• Reforms: A Financial Sector Development Strategy is being prepared to deepen the financial sector in a sustainable manner.

Conclusion

Bhutan's economic recovery in 2014 was driven by hydropower and tourism expansion, but the country remains vulnerable due to its reliance on donor finance and the concentration of economic activity in specific sectors. The government needs to address issues such as private sector development, employment mismatch, and financial sector sustainability to ensure long-term economic stability and growth.