Economic Analysis - Maintaining Our Stable Growth Outlook - JAN 2017
BMI View: We maintain our forecast for real GDP growth in Bhutan to come in at 6.7% in both 2016 and 2017 amid a stable growth outlook. The continued development of the landlocked country's hydropower sector will ensure a steady inflow of foreign direct investment, with India having signed several multi-year deals to develop the hydropower sector. Furthermore, ongoing efforts to strengthen the tourist sector will also lend support to growth.
Bhutan continues to invest in the development of its hydropower sector, having signed deals with India aimed at building more dams and hydropower stations. We expect this to be supportive of growth and believe that it will ensure a steady inflow of foreign direct investment (FDI) into the landlocked country over the coming years. Furthermore, the Bhutanese government's ongoing efforts to strengthen the tourist sector by improving air links and raising awareness of the isolated country will lend support to growth. As such, we maintain our forecast for real GDP growth in Bhutan to come in at 6.7% in both 2016 and 2017.
Hydropower To Remain Key Growth Driver