GDP: While hotels and restaurants are identified as the fastest growing slice of the economy, the construction sector has experienced a noteworthy growth in double digits. Consequently, country’s economy experienced a growth of 6.5 percent in 2015, as Gross Domestic Product (GDP) expanded from Nu 119.5 billion to Nu 132 billion.
After the economic slowdown in 2013, real GDP (after adjusting for inflation) gradually rebounded to 5.7 percent in 2014 and 6.5 percent in 2015. Without adjusting for inflation (nominal GDP), the country experienced a growth of 10.4 percent.
With the expansion in the size of economy, the Royal Monetary Authority’s (RMA) annual report states that the country’s GDP per capita in 2015 increased to USD 2,719.1 from USD 2,610.6 in 2014.
The economic growth, according to the RMA was mainly driven by the secondary sector. While the contribution of the primary sector has also increased marginally, contribution of the tertiary sector to GDP has fallen from 3.8 to 2.4 percentage points.
Going by the sectoral shares to the nominal GDP, agriculture, livestock and forestry, construction, electricity and water supply, general government sector (community, social and personal services), transport, and storage and communication sectors have been the largest sectors for the last decade. These sectors still continue to dominate the country’s economy.
Agriculture, livestock and forestry accounted for 18 percent of nominal GDP in 2015, followed by construction at 17 percent, electricity and water supply at 16 percent, community and social services at 12 percent, and transport, storage and communications at 10 percent.
Crops was the main driver of growth in the primary sector from 2.4 percent to 4.6 percent. The share of livestock and forestry sector to nominal GDP decreased marginally by 0.1 percentage points to 16.7 percent in 2015.
The construction sector emerged as the driver of overall growth that helped the secondary sector grow by 8.1 percent in 2015 from 3.7 percent in the previous year.
Gross value added (GVA), which is the total output of the construction sector after deducting for consumption was estimated at Nu 20.6 billion. This means the sector has experienced a growth of 11.5 percent.
On the other hand, the mining and quarrying sector recorded a decelerated growth of 13.4 percent from 17 percent in 2014.
The electricity and water supply sub-sector registered a growth of 7.4 percent in 2015, after it plummeted to a negative growth of 2.8 percent in the previous year. A favorable monsoon resulting in higher generation in hydropower, according to the RMA contributed to the growth in the sector. Consequently, the real value of electricity and water supply increased to Nu 10.2 billion from Nu 9.5 billion in 2014.
The report highlighted that the export of electricity to India increased by 3.5 percent in 2015, from Nu 10.4 billion the previous year to Nu 10.8 billion. But the overall domestic sales declined significantly by negative 1.3 percent in 2015.
The tertiary sector recorded a decelerated growth, from 8.9 percent in 2014 to 5.4 percent in 2015. Wholesale and retail trade, transport, storage and communication, and the community, social and personal services recorded the highest contributions in this sector.
One of the fastest growing sub-sectors in the economy, according to the report was the hotels and restaurants that recorded a real growth of 16.2 percent in 2015.
The performance of hotels and restaurants is largely attributable to increased number of tourist arrivals during the year which was recorded at 155,121 tourists. In 2015, the international to regional visitor ratio was at 37:63, with growth rates more significant in the regional segment.
International (US dollar paying) visitor dropped by 15.8 percent recording 48,800 arrivals in 2015 from 57,934 arrivals in 2014 due to the major earthquake in Nepal leading to numerous cancellations of plans to visit Bhutan. Correspondingly, there was a decrease in the foreign exchange revenue collection by 2.8 percent from USD 73.2 million in 2014 to USD 71.2 million.