Despite the pandemic, the government is aiming to achieve economic growth of 5 percent by June of this year, according to Minister of Economic Affairs Loknath Sharma.
The GDP rate dropped to negative 10.08% in 2020 which is the lowest in years.
The economy was recovering from the impact of the pandemic, and performed much better in 2021, especially in the second half of 2021. It was recovering to a positive growth trajectory.
Lyonpo Loknath Sharma said that the third lockdown in January this year has again posed a grave situation for the economy.
Lyonpo said that all efforts are being made to minimize the damage. “Respective task forces are trying to maintain the flow of trade and functioning of industries to ensure that the economy doesn’t shut down while containing the spread of the virus which could further impact transport and mobility and delivery of goods and services,” he said.
“The disruption of the economy is inevitable, but we have to continue to forge ahead and manage the disruption by taking cues from how change is managed through innovation and “gig” economy principles.”
The hospitality, tourism, entertainment, and construction sectors remain continuously hit during the pandemic.
Lyonpo said that the CSI sectors are unable to get timely raw materials and medium and large industries are affected with the increasing cost of raw materials, labour, and other associated costs. “The workforce in almost all sectors remains at 40 to 50 percent and this results in either lost production or underutilization of productive capacity.”
Export and import during lockdown
Imports continue to be facilitated at the entry points despite the challenges of infection at the MDPs. Exports are being facilitated and prioritised despite the virus spread and its complications to keep the supply chain moving.
Lyonpo said that cardamom and mandarin exports were picking up until the recent lockdown. “Every effort is being made by the ministry, respective dzongkhags, and task forces in the southern belt to restore and complete the remaining mandarin exports,” Lyonpo said.
Strategies to revamp the economy
Strategies to revamp the economy, the minister said, have undergone several revisions and are being discussed daily to keep up with the changing economic scenario both outside and within the country. The focus has been to ensure easier access to finance, including working capital modality, so that small, as well as big businesses, recover and stabilise quickly.
Lyonpo said that they also need to aggressively pursue ongoing hydropower construction, other construction projects, and fast-track development of the industrial parks to support economic recovery.
Industries at Pasakha were contributing approximately Nu 15 billion annually before the pandemic, and even now their products constitute the top five export products.
“Based on this success, if planned manufacturing industries at Jigmeling and Motanga industrial parks could come to fruition, we will be doing well,” Lyonpo said.
In the meantime, the ministry is also ensuring that farmers are supported with access to markets and assured price support to weather the current difficulties. “We need to ensure the CSI sector maintains and receives all necessary support,” Lyonpo said.
The best way forward, Lyonpo said, is adopting technology in all sectors besides moving our goods and services into a digital economy mode, which requires a huge amount of investment, capacities, skills, and time.
“The national export strategy is being updated. We are also updating shortly to a medium-term economic strategy to quickly reposition, Lyonpo said. “The financial institutions are also working on how best they could fuel the credit path for industrial and economic growth.”