Bhutan: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bhutan

International Monetary Fund

No 2016/206, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper discusses the recent economic developments, outlook, and risks for Bhutan. Following a slowdown in activity in the wake of the rupee shortage, economic growth has picked up more recently. From an average of about 8 percent during the Ninth and Tenth Five-Year Plans spanning fiscal years (FYs) 2003/04–2012/13, real GDP growth fell below 4 percent in FY2012/13 and FY2013/14. Bhutan’s medium-term outlook remains favorable. Commissioning of new hydropower generation projects will boost output, exports, and fiscal revenues. However, domestic risks stem from the need to manage high debt and potentially volatile hydropower-related inflows, which may fuel rapid credit growth and lead to renewed external pressure.

Keywords: ISCR; CR; deficit; current account; authority; authorities endeavor; real GDP; Indian rupee; growth slowdown; staff's advice; monetary policy transmission mechanism; staff's suggestion; Credit; Public and publicly-guaranteed external debt; Imports; South Asia; Global; Middle East (search for similar items in EconPapers)
Pages: 63
Date: 2016-06-30
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