Economic contingency plan for revival still on the road: FM

Finance Minister Namgay Tshering speakig to the media

SANGAY RABTEN | Thimphu

The economic contingency plan is still on the road to revive the economic crisis caused by the pandemic. Finance Minister Namgay Tshering, said at the meet-the-press on 31 December 2021, that the government has planned a series of measures to revive the economy.

The government has pumped in Nu 4 billion for the plan. The allocated budget will be invested mostly in the construction, agriculture, and tourism sectors, according to the minister.

Through the revival strategies, the private sector will be supported. The minister said that the government had already extended the duration of fiscal measures in three phases. Some other monetary measures are loan deferment, interest waive-off, and rescheduling of housing loan payments from 20 to 30 years.

The ministry of finance is discussing with the Royal Monetary Authority (RMA) how to restructure the interest rate in line with the rescheduled housing loan, according to the finance minister.

Adopting a special fiscal policy, the minister said in the upcoming budget, the government will inject a higher share of the capital budget to revive the economy. The government’s spending contributes 37 percent to the Gross Domestic Product (GDP).

The Fiscal Incentive Bill passed in the recently concluded Parliament is also one kind of revival measure. “The Bill is targeted towards the under-performance sectors,” the minister said. The government is also diagnosing the performance of different sectors.

Moving forward towards economic revival, the minister said there should be financial access and cash flow for business individuals. Loan repayment is postponed until 2022 as part of the strategy, and a 50 percent interest rate is waived under the Royal Kidu, with income support provided to laid-off employees.

Getting a preliminary report from the key economic agencies, the economic growth rate report for the year 2021 is yet to be published after two months. However, the minister indicated that the rate would be a little better compared to 2020 based on the proxy quarterly 2021 report.

“Seeing the common denomination, the nominal GDP is on the rise and the country’s economy is not being impacted badly,” the minister said.