2014年-世界发展银行全球_Bhutan_Development_Update_April_2014_23页_1mb

Bhutan Development Update Summary (April 2014)

Core Content

Bhutan's economy experienced a slowdown in 2012 due to policy interventions, leading to a GDP growth of 4.8 percent, the lowest since 2008. However, the economy is expected to rebound in 2013 and 2014, with projected GDP growth of 6.5 percent and 7.3 percent respectively. This recovery is attributed to hydropower construction, improved electricity and food production, and the implementation of the Economic Stimulus Plan (ESP).

Main Economic Developments

• GDP Growth: Expected to rise to 6.5% in 2013 and 7.3% in 2014, driven by hydropower projects, favorable rains, and improved agricultural performance.
• Hydropower: A major component of economic growth, with four hydropower projects under construction, each contributing significantly to GDP. The Chhukha hydropower project's export tariff was increased by 25 paisa per unit, leading to higher revenue.
• Construction Sector: Suffered a slowdown due to the freeze on housing loans, although hydropower construction continued. The Dungsam Cement project is expected to revive cement production in 2014.
• Tourism: Continued to be a key export sector, with 44,000 tourists in 2013 generating US$62.5 million in convertible currency. Tourism revenues are projected to grow with new measures.
• Inflation: Closely follows India's inflation due to Bhutan's reliance on Indian imports. Inflation in Bhutan reached 11.3% in the third quarter of 2013, partly due to the rise in electricity tariffs.
• Fiscal Policy: The government maintained a tight fiscal stance in 2013 due to lower non-hydro revenues and a decline in foreign grant disbursements. Revenue is projected to decline to 19.5% of GDP in FY13/14.
• Public Debt: At 85% of GDP in 2013, external debt remains high but is expected to decrease as hydropower revenues increase. The debt is mainly denominated in Indian rupees, creating a rupee-reserves mismatch.
• Monetary Policy: Tight liquidity conditions were eased in 2013 with the RMA reducing the CRR to 5%. The monetary transmission mechanism has been improved with the introduction of a base rate system and a Short-Term Liquidity Adjustment Window (RSTLAW).
• Credit Growth: Slowed sharply in 2013, with construction and personal loans being the main drivers. The government plans to manage credit growth through tighter fiscal and monetary policies.
• Employment: Unemployment is a growing concern, especially among youths and urban women. The government has introduced a plan for full employment and the ESP aims to boost employment in rural and non-formal sectors.
• Poverty Reduction: Bhutan has made progress in reducing absolute poverty, from 23% in 2007 to 12-13% in 2012. Continued efforts are needed to address non-income poverty, including malnutrition, anemia, and stunting.

Key Figures and Tables

• Figure 1: Economic Growth in Bhutan is heavily influenced by hydropower developments.
• Figure 2: Inflation is closely tied to India, with food and beverages having the highest weight in Bhutan's CPI.
• Figure 3: Wage Bill of Bhutan shows the government's public sector compensation as a percentage of GDP.
• Figure 4: Bhutan's Balance of Payments indicates a significant current account deficit.
• Figure 5: Credit Growth has slowed due to construction constraints and tighter monetary conditions.
• Figure 6: Construction and personal loans were the main contributors to credit growth.
• Figure 7: Unemployment primarily affects youths and urban women.
• Figure 8: Anemia prevalence in women is a major health concern.
• Table 1: Electricity tariffs in Bhutan are among the lowest in the region.
• Table 2: Cement production has declined over the past few years but is expected to rebound in 2014.
• Table 3: Government budget shows a shift in revenue and expenditure composition.
• Table 4: Poverty Dynamics indicate a decline in poverty but ongoing challenges for infra-marginal groups.

Special Focus

• Special Focus 1: Malnutrition and stunting require a coordinated response across sectors to improve health outcomes.
• Special Focus 2: Cultural heritage protection is being treated as a national asset, potentially improving employment opportunities in rural areas.

Economic Stimulus Plan (ESP)

• Funding: Rs 5 billion grant from India, with Rs 1.9 billion allocated to an SME revolving fund.
• Implementation: The SME revolving fund includes two parts: Revolving Fund-I (Rs 1.5 billion) for cottage and small industries, and Revolving Fund-II (Rs 0.4 billion) for non-formal rural activities.
• Additional Measures: Rs 2.1 billion is to be injected into banks as subordinated debt to enhance lending capacity. Rs 1 billion is allocated to a Special Support Scheme for higher education, senior citizens, and guaranteed employment.

Risks and Challenges

• External Debt: High at 85% of GDP but expected to fall with increased hydropower revenues.
• Rupee-Reserve Mismatch: A significant risk due to the reliance on Indian rupees for trade and debt service.
• Inflationary Pressures: Expected to persist in 2014 due to electricity tariff increases, but the impact on poverty is expected to be modest due to the progressive nature of tariffs.
• Liquidity Management: Tight monetary conditions are necessary to prevent overheating and another rupee shortage. The government is considering increased treasury bill issuance to manage excess liquidity.
• Public Sector Compensation: An upward revision is under discussion to match inflation, which could increase domestic demand and require fiscal and monetary tightening.

Conclusion

Bhutan's economic recovery is supported by hydropower development and the ESP. However, the country faces challenges in managing external debt, inflation, and liquidity. Continued efforts are needed to address non-income poverty and ensure sustainable economic growth.