𝐖𝐡𝐨𝐥𝐞𝐬𝐚𝐥𝐞 𝐑𝐞𝐭𝐚𝐢𝐥 𝐓𝐫𝐚𝐝𝐞 𝐚𝐧𝐝 𝐄𝐥𝐞𝐜𝐭𝐫𝐢𝐜𝐢𝐭𝐲 𝐃𝐫𝐢𝐯𝐞 𝐆𝐃𝐏 𝐆𝐫𝐨𝐰𝐭𝐡, 𝐖𝐡𝐢𝐥𝐞 𝐭𝐡𝐞 𝐀𝐫𝐭𝐬 𝐒𝐞𝐜𝐭𝐨𝐫 𝐋𝐚𝐠𝐬

…𝒆𝒍𝒆𝒄𝒕𝒓𝒊𝒄𝒊𝒕𝒚 𝒔𝒆𝒄𝒕𝒐𝒓 𝒇𝒂𝒄𝒆𝒔 𝒔𝒆𝒕𝒃𝒂𝒄𝒌𝒔, 𝒉𝒐𝒕𝒆𝒍 𝒂𝒏𝒅 𝒓𝒆𝒔𝒕𝒂𝒖𝒓𝒂𝒏𝒕 𝒊𝒏𝒅𝒖𝒔𝒕𝒓𝒚 𝒓𝒆𝒃𝒐𝒖𝒏𝒅𝒔, 𝒂𝒏𝒅 𝒅𝒊𝒗𝒆𝒓𝒔𝒆 𝒔𝒆𝒄𝒕𝒐𝒓 𝒑𝒆𝒓𝒇𝒐𝒓𝒎𝒂𝒏𝒄𝒆𝒔 𝒉𝒊𝒈𝒉𝒍𝒊𝒈𝒉𝒕 𝒆𝒄𝒐𝒏𝒐𝒎𝒊𝒄 𝒔𝒕𝒓𝒆𝒏𝒈𝒕𝒉𝒔 𝒂𝒏𝒅 𝒘𝒆𝒂𝒌𝒏𝒆𝒔𝒔𝒆𝒔

By Sonam Choki

The National Accounts Statistics for 2024 provide a thorough overview of Bhutan’s economic performance, revealing significant shifts and trends across various sectors. Among the key findings, the wholesale and retail trade sector emerges as the largest contributor to Bhutan’s Gross Domestic Product (GDP), highlighting its essential role in the national economy. Equally important is the electricity sector, which, despite facing some challenges, continues to be a major player due to its crucial role in powering the country’s industries. Conversely, the art, entertainment, and recreation sector represents one of the least contributing sectors to GDP, indicating ongoing difficulties and a need for targeted support to enhance its economic impact. This detailed analysis offers valuable insights into the contributions of different industries, from the leading drivers of economic growth to the sectors in need of strategic intervention.

The recently released National Accounts Statistics 2024 provides a comprehensive examination of Bhutan’s economic performance across various sectors. This in-depth analysis delves into the contributions and growth rates of different industries, arranged from the most influential to the least impactful contributors.

In the year 2023, the wholesale and retail trade sector emerged as the largest contributor to Bhutan’s Gross Domestic Product (GDP), highlighting its substantial role within the nation’s economic framework. Despite this prominence, the sector experienced a noticeable deceleration in growth. The wholesale and retail trade sector contributed a significant 11.67% to GDP, with a Gross Value Added (GVA) of Nu 29,105.52 million. This contribution represents a deceleration from the previous year’s growth rate of 14.35%, which dropped to 5.98% in 2023. This slowdown can be attributed to a variety of factors, including changes in consumer behavior, fluctuations in market demand, and broader economic conditions. Notably, the repair services sub-sector, although relatively small, continued to bolster the overall performance of the wholesale and retail trade sector. The significant size and enduring importance of this sector highlight its pivotal role in Bhutan’s economy, contributing 0.68 percentage points to the overall GDP growth.

The electricity sector, while critical to Bhutan’s economic infrastructure, faced a challenging year in 2023. The sector’s growth rate fell to -2.05%, indicating a contraction from the previous period’s positive performance. This decline is primarily due to reduced electricity generation, which experienced a negative growth rate of -6.19%. The sector’s GVA amounted to Nu 28,951.83 million, accounting for 11.61% of GDP. The decrease in growth rate, coupled with reduced generation capacity, reflects the challenges faced by this sector, such as potential issues in maintaining infrastructure or fluctuations in demand. Despite these hurdles, the electricity sector remains an essential component of Bhutan’s economic framework, highlighting its critical role in powering various industries and supporting overall economic activity.

The hotel and restaurant sector experienced a remarkable resurgence in 2023, reflecting a strong rebound from the adverse impacts of the COVID-19 pandemic. The sector’s growth rate surged to an impressive 50.64%, marking a significant recovery from the previous year’s performance. This robust growth indicates a resurgence in tourism and hospitality activities, driven by increasing travel and dining out among both locals and visitors. The sector’s GVA rose to Nu 4,262.69 million, contributing 1.71% to GDP. This resurgence represents a recovery from earlier economic disruptions and underlines the sector’s vital role in Bhutan’s economic recovery. The impressive growth rate, compared to the previous year’s 31.58%, illustrates the sector’s capacity to rebound strongly from economic setbacks, contributing 0.54 percentage points to GDP growth.

The finance and insurance sector exhibited robust performance in 2023, with a notable growth rate of 13.42%. This growth is largely driven by advancements in financial services, particularly within the banking sector, which has seen increased activity and improved service offerings. The sector’s GVA reached Nu 13,847.13 million, representing 5.55% of GDP. This positive performance reflects a strengthened financial system and increased economic confidence. The finance and insurance sector’s contribution to GDP growth was significant, adding 0.77 percentage points. The sector’s strong growth underlines its crucial role in facilitating economic transactions, investments, and overall financial stability in Bhutan.

The professional, administrative, and support services sector demonstrated strong performance in 2023, with a growth rate of 9.63%. This growth reflects increasing demand for specialized services such as consultancy and administrative support, which are essential for business operations and organizational efficiency. The sector’s GVA rose to Nu 4,717.43 million, contributing 1.89% to GDP. Although there was a slight deceleration from the previous year’s growth rate, the sector’s positive performance highlights its expanding role in Bhutan’s economy. The increasing reliance on professional services and administrative support accentuates the sector’s importance in supporting various economic activities and contributing to overall economic growth.

The education sector saw positive growth in 2023, with a growth rate of 6.79%. This growth reflects improvements in both public and private education systems, driven by increased investments in educational institutions and services. The sector’s GVA increased to Nu 11,862.66 million, contributing 4.76% to GDP. The positive growth rate signifies the sector’s expanding role in Bhutan’s economic structure, as educational development is closely linked to the nation’s long-term economic prospects. The increased investment in education highlights its importance in fostering human capital and supporting economic advancement.

The mining and quarrying sector experienced a strong rebound in 2023, with a growth rate of 36.96%. This impressive recovery comes after a period of decline, reflecting renewed activity and investment in the sector. The sector’s GVA was estimated at Nu 5,513.92 million, contributing 2.21% to GDP. This robust growth draws attention to the sector’s potential for further expansion and highlights its importance within Bhutan’s economic framework. The sector’s recovery indicates a positive outlook and suggests that mining and quarrying continue to play a significant role in the country’s economic development.

The real estate and dwellings sector exhibited modest growth in 2023, with a growth rate of 2.17%. This represents a slight decrease from the previous year’s rate, reflecting slower activity within the property market. Despite this, the sector’s GVA reached Nu 8,768.87 million, contributing 3.52% to GDP. The sector’s performance indicates ongoing activity in property transactions and rental services, though at a slower pace compared to previous years. The modest growth gives emphasis to the sector’s continued importance in Bhutan’s economic scenery, despite facing challenges that may impact its growth trajectory.

The transportation and storage sector saw a growth rate of 7.91% in 2023, reflecting improvements primarily in air transport services. This positive performance highlights the sector’s role in facilitating the movement of goods and people, which is essential for economic activities. Although specific GVA figures are not detailed, the sector’s growth underlines its importance in supporting economic connectivity and logistics. The improvements in transportation and storage services contribute to overall economic efficiency and support various industries reliant on these services.

The art, entertainment, recreation, and other services sector faced a challenging year in 2023, with a decline in growth rate to -5.95%. This negative performance reflects ongoing difficulties within this sector, which may include reduced consumer spending or disruptions in entertainment and recreational activities. The sector’s GVA increased slightly to Nu 639.91 million, but its shrinking GDP share and negative growth highlight persistent challenges. The sector’s struggles point to the need for strategies to support its recovery and growth, particularly as it continues to face headwinds in a changing economic environment.

The forestry and logging sector recorded a growth rate of 5.42% in 2023, showing improvement from the previous year’s performance. Despite this positive growth, the sector’s contribution to GDP remains minimal, with a GVA of Nu 6,186.14 million, representing just 0.12% of GDP. The sector’s growth reflects ongoing activities in forestry and logging, though its relatively small economic impact highlights its limited role compared to other sectors. The positive growth rate indicates that the sector remains active and contributes modestly to Bhutan’s economic framework.

The human health and social work sector experienced a growth rate of 6.34% in 2023, reflecting improvements in health and social services. The sector’s GVA reached Nu 4,309.06 million, contributing 1.73% to GDP. This growth highlights the increasing emphasis on health and social services in Bhutan, driven by investments in healthcare infrastructure and social support systems. The sector’s positive performance highlights its role in enhancing the well-being of the population and supporting overall economic development.

The livestock sector demonstrated a growth rate of 3.70% in 2023, reflecting a notable improvement from the previous year’s performance. The sector’s GVA increased to Nu 14,743.30 million, contributing 5.91% to GDP. This positive performance underlines the sector’s importance in Bhutan’s agricultural and economic setting, highlighting its role in food production and rural development. The growth in the livestock sector indicates a stable and expanding contribution to Bhutan’s economy.

The manufacturing sector experienced a growth rate of 4.42% in 2023, reflecting a deceleration from the previous year’s performance. Despite this slowdown, the sector’s GVA increased to Nu 20,065.37 million, representing 8.05% of GDP. The decline in growth rate suggests that while the manufacturing sector continues to contribute significantly to the economy, it faces challenges that may impact its expansion. The sector’s substantial contribution to GDP calls attention to its importance, even as growth rates fluctuate.

The water supply sector recorded a stable growth rate of 6.00% in 2023, maintaining the same rate as the previous year. However, its contribution to GDP remains minimal, with a GVA of Nu 61.53 million, representing just 0.02% of GDP. The sector’s limited economic impact reflects its relatively minor role in the broader economic framework. Nonetheless, the stable growth rate indicates ongoing activity and investment in water supply services, essential for supporting public health and infrastructure.