Download - Macroeconomic Performance and Outlook
Enhancing Happiness and Sustainable Development through Partnerships
14th Round Table Meeting
12th-14th March , 2019
Ministry of Finance
Macroeconomic Performance and
Outlook
Outline
1. Macroeconomic
Performance & Outlook
2. Development financing needs
5. Fiscal measures
6. Way forward
3. Innovative financing
4. Challenges
28.7
17.9
4.6
7.5
0
5
10
15
20
25
30
198
1
198
3
198
5
198
7
198
9
199
1
199
3
199
5
199
7
199
9
200
1
200
3
200
5
200
7
200
9
201
1
201
3
201
5
201
7
Growt rate in % Long term growth
Tala Commissioning
The growth mainly driven by hydropower.
Chukha Commissioning
Growth Trend
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1981-9
0
1991-0
0
2001-1
0
2010-1
7
Growth rate
Average
Bangladesh
Bhutan
India
Nepal
Sri Lanka
0
500
1000
1500
2000
2500
3000
3500
4000
19
81-9
0
1991-0
0
2001-1
0
2010-1
7
GDP per Capita
GDP growth and GDP per capita remains above the regional average.
Bhutan in region
Hydropower contributes
about 30% of GDP in
2017
The economy witnessed structural changes since 5th FYP.
Agriculture
Industry
Service
Real Sector
51
20
30
15
(10)
-
10
20
30
40
50
60
-
10
20
30
40
50
60
20
08
/09
20
09
/10
20
10
/11
20
11
/12
20
12
/13
20
13
/14
20
14
/15
20
15
/16
20
16
/17
20
17
/18
Gro
wth
%
% o
f G
DP
NFA (LHS) Domestic credit growth (RHS) Pvt sector credit growth (RHS)
Persistent excess liquidity on account of Net Foreign Assets.
Monetary Sector
02468
101214161820
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
20
13
20
16
Mar
-17
Jun
-17
Sep
-17
Dec
-17
Mar
-18
Jun
-18
Sep
-18
Dec
-18
Percent
Bhutan India
Bhutan tracks India’s inflation.
Monetary Sector
-40
-30
-20
-10
0
10
20
30
40
50
200
8/0
9
200
9/1
0
201
0/1
1
201
1/1
2
201
2/1
3
201
3/1
4
201
4/1
5
201
5/1
6
201
6/1
7
201
7/1
8
% o
f G
DP
Current A/C Capital A/C Financial A/C Change in reserves
Overall balance of BOP has been positive on average.
External Sector
Current account deficit remained at 25% of GDP on average.
Outflows in 11th FYP:
-Imports 46% of GDP
-Interest repayment 9%
of GDP
Inflows in 11th FYP:
-Exports 25% of GDP
-Remittances 8% of
GDP
11th FYP CA
deficit: 25% of
GDP
11th FYP Trade
deficit: 21% of
GDP
Current Account Balance
International reserves in FY2018 was US$ 1.11 billion.
Maintained in CC & INR at 70:30 ratio
Meets 13 months of merchandise
imports
Meets 29 months of essential imports
International reserves
Fiscal balance maintained at sustainable level.
(5)
-
5
10
15
20
25
30
200
8/0
9
200
9/1
0
201
0/1
1
201
1/1
2
201
2/1
3
201
3/1
4
201
4/1
5
201
5/1
6
201
6/1
7
201
7/1
8
10FYP 11FYP
% o
f G
DP
Domestic Revenue Grants Current Capital Fiscal Balance
Fiscal Sector
Has been increasing on account of hydropower projects.
103
64
100
114
107
-
20
40
60
80
100
120
140
2008/0
9
2009/1
0
2010/1
1
2011/1
2
2012/1
3
2013/1
4
2014/1
5
2015/1
6
2016/1
7
2017/1
8
% o
f G
DP
External Hydro Debt Non-Hydro Debt Public Sector Debt
Public debt
6.17.2
6.05.0
5.7Real GDP growth
Economy projected to growth at 6% on average in 12th FYP.
Current account deficit
%GDP -15-11
-9 -8 -7
Pvt. Credit growth 17 17
10
2027
2018/19 2019/20 2020/21 2021/22 2022/23
Macroeconomic outlook
Key fiscal targets identified to ensure sustainable and stable
fiscal path in 12th FYP.
Fiscal Deficit to be maintained
below 3% of GDP
Maintain Tax to GDP ratio at 12%
Domestic revenue to cover at least
80% of total expenditure by end of
12th FYP
Non-Hydro debt to be contained
below 35% of GDP
Fiscal Targets
Deficit of Nu. 29.243b (US$ 418m) in the 12th FYP.
Nu.218b
($3b)
Nu.62b
($881m)
Nu.1.4b
($20m)
Revenue
Domestic Revenue External Grants
Internal Grants
Nu.281b ($4b)
Nu.194b
($2.8b)
Nu.116b
($1.7b)
Expenditure
Current expenditure
Capital expenditure
Nu.301b
($4.4b)
Nu. 29.243b
(US$ 418m)
Fiscal deficit
US$1=Nu.70
Development Financing Needs
Debt to GDP is expected to fall in the 12th FYP.
10
4%
10
6%
99
%
93
%
88
%
Fall in public debt
to GDP
76%99%
60%73%
16%25%
External Debt to GDP
Hydro Debt to GDP
Non-hydro Debt to GDP
Debt Projection
Supplement financing for Development.
Endowment funds
Bhutan for life
BIOFIN
Bhutan Climate Fund
Green bonds
Others being studied
GNH of Business Certification
Implemented Exploring
Public Private partnership
Innovative Financing
Low level of economic diversification: Mainly dependent
on hydropower.
Economic vulnerabilities: In addition to the impact of
climate change on economy, shocks from internal and
external source.
Development financing gaps: Significant resource gaps
Narrow tax base
High level of public debt
Persistent current account deficit
Challenges
Addressing some of the challenges
Implement innovative financing mechanism to supplement
development financing needs
Broadening tax base through modernization of sales tax into a
smart GST
Strengthen PFM: Institute FC & IC, introduce e-payment,
revise PRR and upscale e-GP.
Deepen Fiscal decentralization: Annual (Block) grants to LGs
Improving investment climate through amendment and
revisions of laws and regulations
Fiscal Measures
Solicit continued support of our development
partners for a smooth transition and for
achieving the SDGs and enhancing GNH
Way Forward
12th FYP is the last Plan before graduating from LDC.
Tashi Delek