Bhutan’s economy is expected to grow to 6.6% in 2024-25, driven by hydropower, mining, construction, and tourism. The Puna-II hydropower project and a tourism revival are key drivers. Medium-term growth in Indonesia is expected due to robust electricity production, Dorjilung hydropower project, and mining expansion. However, weak agriculture performance and widening fiscal deficits hinder growth.
It is anticipated that the deficit will increase to 5.6% of GDP in 2024–2025 and then widen even more to 7.2% in 2025–2026. In fiscal year 2025–2026, the Bank also projected that the nation’s public debt would increase to 128 percent of GDP, however it is deemed sustainable because the majority of it is associated with hydropower. Growing debt payment costs could reduce the amount of money available for social programs. In fiscal years 2024–2025 and 2025–2026, CAD is expected to drop to 17.6 and 9.2 percent of GDP, respectively, before moderately declining further in the medium term as a result of the ongoing fall in imports of equipment used in cryptocurrency mining.
Due to a decrease in the import of equipment connected to cryptocurrencies and an increase in tourism exports, the CAD stayed high in fiscal year 2023-24, accounting for 22.1% of GDP, compared to 34% in fiscal year 2022-23. With more hydropower exports following Puna-II’s commissioning, as well as more non-hydropower and tourism exports, exports are expected to expand. Consequently, it is anticipated that international reserves will rise to USD 643 million by June 2025.