Country Report Bhutan May 2011

Outlook for 2011-12: Economic growth

Hydroelectric projects and the export of electricity to India will continue to underpin Bhutan's economic growth in the forecast period. Real GDP growth (at factor cost) rose to 6.7% in fiscal year 2009/10 (July-June), from 4.7% in 2008/09. The figures shown in the tables are for GDP growth on an expenditure basis, which measured economic growth in 2009/10 at 15.2% year on year, compared with a 2.7% year-on-year decline in 2008/09. GDP growth (on an expenditure measure) will fall from this high base in 2010/11, to an estimated annual average of 7%. It will remain stable, at 6.9% a year in 2011/12­2012/13. Industrial development, as well as a revival in tourism in 2011-12 following a sharp decline in tourist arrivals in 2009, will also support economic expansion. In the light of the fact that the poverty level in Bhutan remains high, at 23%, despite years of healthy GDP growth, the authorities are keen to promote greater regional development. To this end, officials will continue to encourage fast-growing industries that offer potential employment opportunities, such as tourism, financial services and information technology.

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