Bhutan: 2007 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Bhutan
IMF Staff Country Reports, October 16, 2007
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- Bhutan: 2007 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Bhutan
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Bibliographic details
- Published: October 16, 2007
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451806274.002
Macroeconomic setting and outlook
- The staff report explains the macroeconomic setting, economic developments, outlooks, risks, and challenges for Bhutan.
- Bhutan’s economic prospects are described as bright.
- Construction of two hydropower projects will help sustain real GDP growth over the medium term.
- With the exchange rate peg to the Indian rupee, inflation is expected to be in line with price developments in India.
Growth drivers and sectoral developments
- Key projected driver: construction of two hydropower projects supporting sustained real GDP growth over the medium term.
- Exchange rate arrangement: peg to the Indian rupee, linking domestic inflation expectations to Indian price developments.
Risks and challenges
- The report identifies risks and challenges associated with Bhutan’s outlook (details summarized as part of the staff report).
- Dependence on hydropower projects for medium-term growth implies sensitivity to project implementation and external conditions affecting power exports.
Policy assessment and institutional observations
- Executive Directors commended Bhutan’s prudent macroeconomic policies and political stability.
- Outcomes attributed to these policies and stability:
- Robust growth.
- An appreciable improvement in social indicators.
- Progress toward meeting the Millennium Development Goals.
Key thematic subjects covered
- Credit
- External debt
- Fiscal policy
- Fiscal stance
- Imports
- International trade
- Money
- Public debt
Source: Bhutan: 2007 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Bhutan.