CDP Monitoring Reports - Bhutan

Bhutan saw robust economic growth over the decade 2010 and 2019 with more than 5% average annual GDP growth. This growth was also translated into substantial reductions in poverty. The country meets all graduation criteria and continues to make steady progress on GNI and HAI. Bhutan has been highly successful in containing the COVID pandemic through lockdowns and border closures at the earlier stages of the pandemic and through an effective vaccination program in 2021. However, the strict containment measures did have severe economic implications and GDP dropped by an estimated 10% in 2020. Growth has now returned, and the economy is projected to grow by 5% in the 2021/22 financial year. Bhutan has submitted its second annual report on the preparation of a smooth LDC graduation and been responsive to CDP communications. The STS into is being integrated into the 13th national development plan and the country seems well on track for its graduation preparations. The CDPs main concern for continued development is the heavy reliance on hydropower exports, tourism and agriculture. The Committee recommends that the Government continues its efforts to foster economic diversification, supporting in particular the development of small and medium sized enterprises and cottage industries to help expand domestic production and reduce import dependency. It also recommends strengthening and diversifying its linkages with the Indian economy.