Financing needs and gaps:  Bhutan

Pema Dorji

Department of Macroeconomic Affairs

Growth rate: South Asian Economy

Source: World bank

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1981

‐90

1991

‐00

2001

‐10

2010

‐17

Growth rate

AverageBangladeshBhutanIndiaNepalSri Lanka

 ‐

 10,000

 20,000

 30,000

 40,000

 50,000

 60,000

2013/14 2014/15 2015/16 2016/17 2017/18

Capital

Interest payment

Primary Current

Grants_Others

Grants_GoI

Non‐tax revenue

Tax revenue

Financing needs: Government investments

GAP

‐10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2013/14 2014/15 2015/16 2016/17 2017/18

Capital

Interest payment

Primary Current

 Resource Gap

Net Borrowings

Net lending (NL)

Grants_Others

Grants_GoI

Non‐tax revenue

Tax revenue

Financing source: Government Investment

Financing needs: Rest of the world transaction

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2013/14 2014/15 2015/16 2016/17 2017/18

Debit_SIBDebit_PIBDebit_ServiceImports (fob)Credit_SIBCredit_PIBCredit_ServiceExports (fob)

GAP

∆Reserve

Net Errors & Omissions

FA

 CA

Credit_SIB

Credit_PIB

Credit_services

Exports (fob)  (20,000.0)

 ‐

 20,000.0

 40,000.0

 60,000.0

 80,000.0

 100,000.0

 120,000.0

 140,000.0

2013/14 2014/15 2015/16 2016/17 2017/18

Debit_SIB

Debit_PIB

Debit_services

Imports (fob)

Financing source: Rest of the world transaction

Financing need and GAP

‐50.0

‐40.0

‐30.0

‐20.0

‐10.0

0.0

10.0

20.02013/14 2014/15 2015/16 2016/17 2017/18

Current Account Balance Fiscal Balance  Resource Gap

Financing needs: 12FYP (FY2019‐2023)

Source: GNHC

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2018/19 2019/20 2020/21 2021/22 2022/23

   Primary Current

Interest payments

Capital

Financing

Others

GoI

Internal Grants (Trust Funds)

Non‐tax

Tax

Financing needs, Gaps & Sources: 12FYP‐Government investments

‐10000

‐5000

0

5000

10000

15000

20000

25000

30000

2018/19 2019/20 2020/21 2021/22 2022/23

BOP COTI (Millions of Nu)

Goods Balance (CAB)

Services (CAB)

PIB (CAB)

SIB (CAB)

Capital A/C

FDI (FA)

Other Investment (FA)

∆Reserves

Financing needs, Gap & sources: 12FYP‐Rest of the world transaction

‐80000

‐60000

‐40000

‐20000

0

20000

40000

60000

2018

/19

2019

/20

2020

/21

2021

/22

2022

/23

BOP India (Millions of Nu)

Goods Balance (CAB)

Services (CAB)

PIB (CAB)

SIB (CAB)

Capital A/C

FDI (FA)

Other Investment (FA)

∆Reserves

Financial sector: Issues and challenges 

• Management issues – may loose consumer confidence • Credit concentration• High NPL – under pricing of risk• Mismatch of assets and liabilities• Inactive secondary market • Excess liquidity but volatile liquidity• Governments participation in capital market• Dominant players 

Future challenges and opportunities 

• Graduation from LDC to MIC• Volatile growth – economic diversification (seasonal)• Increase tax to GDP ratio• Tax measures to improve cash management• RMA’s new market based monetary policy operation framework• Timely production of leading indicators • SDG assessment and financing needs • Capital market development to address future financing needs

Thank you