World Bank2014-06-122014-06-122014-04https://hdl.handle.net/10986/18656After a policy-engineered slowdown in 2012, which saw GDP growth decline to 4.8 percent, the lowest since 2008, Bhutan's economy is expected to rebound to 6.5 percent this year, supported by hydropower construction and higher electricity and food production, following favorable rains. The tight fiscal stance introduced in 2012 has been maintained to bring spending in line with lower non-hydro revenues and a slowdown in foreign grant disbursements, but the revenue situation is expected to improve with the commissioning of cement and electricity projects. Bhutan's external debt, at 85 percent of GDP, remains high, but is likely to fall sharply as assured hydropower revenues begin to flow from projects for which the external loans were taken. However, its narrow exports base and the large rupee-reserves mismatch make the country vulnerable to shortfalls in external earnings and pose a moderate risk. Bhutan's success in reducing absolute poverty is noteworthy, with the poverty rate falling from 23 percent in 2007 to 12-13 percent in 2012, improving the lot of the poorest segments of the population rather than merely that of those clustered around the poverty line. A rapid growth of commercial agriculture, expanding rural infrastructure, and beneficial effects from the construction of massive hydropower projects has established a sound platform for further poverty reduction. However, continued out-migration to urban areas and vulnerability of infra-marginal groups, the relative absence of formal social protection institutions, youth unemployment, and the persistence of malnutrition, anemia and stunting point to the need for continued effort at tackling non-income poverty. The macroeconomic projections for 2014 set GDP growth at 7.3 percent, stemming from new projects, increased tourism receipts, easier credit conditions and the effects of the Economic Stimulus Plan.en-USCC BY 3.0 IGOACCESS TO SERVICESACCOUNTINGADVERSE IMPACTSAGRICULTUREAGRICULTURE ORGANIZATIONALTERNATIVE EMPLOYMENTALTERNATIVE INVESTMENTANNUAL GROWTHASSET CLASSIFICATIONASSETSBALANCE OF PAYMENTBALANCE OF PAYMENTSBANK CREDITBANK FINANCINGBANKING SECTORBANKING SYSTEMBENCHMARKBILLBORROWINGSBROAD MONEYBUSINESS OPPORTUNITYCAPITAL ADEQUACYCAPITAL FUNDCASH RESERVECASH RESERVE RATIOCENTRAL BANKCOLLATERALCOMMERCIAL BANKSCONSUMER INFLATIONCONSUMER PRICE INDEXCONSUMER PRICE INFLATIONCOOPERATIVESCORPORATE DEPOSITSCREDIT BUREAUCREDIT GROWTHCREDIT OUTSTANDINGCROP LOSSESCURRENCYCURRENT ACCOUNTCURRENT ACCOUNT DEFICITCURRENT ACCOUNT SURPLUSCURRENT EXPENDITURESCURRENT PRICESDEBT RATIOSDEBT REPAYMENTDEBT SERVICEDEBT SERVICE PAYMENTSDEBT SERVICINGDEBT STOCKDEPOSITDEPOSITSDEVELOPMENT BANKDEVELOPMENT POLICYDEVELOPMENT STRATEGYDISBURSEMENTDISBURSEMENTSDIVIDENDSDOMESTIC CAPITALDOMESTIC CAPITAL MARKETDOMESTIC CONSUMPTIONDOMESTIC DEBTDOMESTIC DEMANDDONOR RESOURCESDONOR SUPPORTEARNINGSECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC DEVELOPMENTSECONOMIC GROWTHECONOMIC LIBERALIZATIONEMPLOYMENT OPPORTUNITIESENERGY DEMANDENTREPRENEURSHIPENTREPRENEURSHIP DEVELOPMENTEXCESS LIQUIDITYEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORT REVENUESEXPORTSEXTERNAL BORROWINGEXTERNAL DEBTEXTERNAL FINANCINGEXTREME POVERTYFAMILIESFAMILY RESPONSIBILITIESFARMERSFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONSFINANCIAL RESOURCESFINANCIAL SECTORFINANCIAL SECTOR DEVELOPMENTFINANCIAL STABILITYFINANCIAL SYSTEMFISCAL BALANCEFISCAL POLICIESFLEXIBLE INTEREST RATESFLOATING RATEFOOD PRICEFOOD PRICESFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVESFOREIGN FINANCINGFULL EMPLOYMENTGDPGENDERGOVERNMENT BUDGETGROSS DOMESTIC PRODUCTHOLDINGHOUSEHOLDSHOUSINGHOUSING LOANSHUMAN RESOURCEHUMAN RESOURCESIMBALANCESIMPORTIMPORTSINCOME TAXINEQUALITIESINFLATIONINFLATIONARY PRESSURESINFRASTRUCTURE DEVELOPMENTINHERITANCEINTEREST RATEINTEREST RATESINTERNATIONAL RESERVESINTERNATIONAL TRANSACTIONSINVESTMENT OPPORTUNITIESINVESTMENT PROJECTSISSUANCEISSUANCE OF TREASURY BILLSJOB OPPORTUNITIESLABOR COSTSLABOR FORCELABOR FORCE SURVEYLAND VALUESLAWSLIQUIDITYLIQUIDITY CONDITIONSLIVING STANDARDSLOANLOAN RATESLOAN-TO-DEPOSIT RATIOLOCAL CURRENCYLOCAL ECONOMYLONG-TERM LOANSM2MANDATESMARKET CONDITIONSMARKET INFRASTRUCTUREMARKET PRICESMIGRATIONMONETARY AUTHORITYMONETARY CONDITIONSMONETARY POLICYMONETARY TRANSMISSIONMULTIPLIER EFFECTSNATIONAL BANKNON-PERFORMING LOANSNONBANK FINANCIAL INSTITUTIONSNONBANKSNUTRITIONORGANIZATIONAL STRUCTUREPERSONAL LOANSPORTFOLIOPOVERTY REDUCTIONPRESENT VALUEPRICE FLUCTUATIONSPRIVATE SECTOR CREDITPROFITABILITYPROVISIONING RULESPRUDENTIAL REGULATIONSPUBLIC DEBTPUBLIC FINANCEPUBLIC GOODPUBLIC SECTOR DEBTPUBLIC SPENDINGPURCHASING POWERPURCHASING POWER PARITYRAPID GROWTHREAL ESTATEREAL ESTATE LOANSREAL GDPREAL INTERESTREAL INTEREST RATESRECEIPTSREPAYMENTREPAYMENT PERIODREPAYMENTSRESERVESRETIREMENTREVOLVING FUNDSAFETY NETSSAVINGSSETTLEMENTSHORT-TERM LIQUIDITYSHORTFALLSSLOWDOWNSOCIAL SAFETY NETSSOURCE OF INCOMESTRONG DEMANDSUBORDINATED DEBTSUBORDINATED DEBTSSUBSIDY POLICYSUPPLY-SIDETAXATIONTIME HORIZONSTOTAL DEPOSITSTOTAL EXPORTSTOTAL EXTERNAL DEBTTOTAL INVESTMENTTRADE AGREEMENTSTRADE BALANCETRANCHETRANSACTIONTRANSACTION COSTSTRANSMISSION MECHANISMTRANSPARENCYTRANSPORTTREASURYUNEMPLOYMENTUNEMPLOYMENT RATEURBAN AREASURBANIZATIONVILLAGESWAGESWATER SUPPLYWEIGHTS10.1596/18656