Unlocking Bhutan’s Potential: Measuring Potential Output for the Small, Landlocked Himalayan Kingdom of Bhutan
The hydropower sector has driven Bhutan's economic growth in the past two decades with growth rates averaging 7.9%. Yet, the economy has not been invulnerable to market fluctuations and external shocks. This ADB South Asia Working Paper analyzes how Bhutan can create sustainable and inclusive growth, alongside the continuous expansion of its hydropower industry. It examines how certain policies can impact Bhutan's potential growth over 2013–2030. Results show that higher investment in education, health, and efforts to diversify its economic base—including enhancement of new industries with linkages to regional and global value chains—can further drive economic growth and improve the country's living standards.
Author: Sabyasachi Mitra, Sarah Carrington, and Anthony Baluga
Tags: Bhutan, Energy, Economics, Hydropower, ADB, South Asia, Sustainability, Global Value Chains, Economic Growth