Massive 13th Five-Year Plan to Transform Bhutan

The government aims to achieve transition to a high-income economy by 2029

KP Sharma

The 13th Five-Year Plan budget expenditure is 512.28 billion Ngultrum, an increase of 63%, the highest level so far.

Finance Minister Lekey Dorji outlined to parliament yesterday that a key goal of the plan is to transform Bhutan into a high-income country through innovation and sustainability, with a GDP of $5 billion by the end of the plan.

Of the total budget expenditure, N356.34 billion is expected to be available resources, while the remaining N35.93 billion will be financed through deficit financing. Domestic revenue is expected to contribute N327.34 billion, while grants will contribute N325 billion.

Current expenditure is estimated at N267.28 billion, mainly for salaries, allowances and interest on water and electricity loans.

Capital expenditure is N245 billion and will be financed through revenue surplus (24.5%), grants (51%), and concessional domestic and foreign borrowing (24.5%).

The 13th Five-Year Plan focuses on building a healthy and productive society through equitable access to health care, education and social security. It also aims to strengthen national sovereignty, territorial integrity, security, unity, well-being, resilience and economic prosperity.

Leonpo Leki Dorji highlighted strategic approaches aligned with international commitments such as the Sustainable Development Goals (SDGs), human rights instruments and environmental agreements.

The minister said the plan adopts a four-cluster approach to strengthen coordination and cooperation between the economic, social, security and governance sectors, in line with the 2022 Public Sector Transformation Plan.

The plan supports eight national programs aimed at achieving specific outcomes and outputs that are critical to sustainable development. On the economic front, the government aims to achieve a significant increase in GDP to $5 billion by 2029, with a GDP per capita of more than $6,174.

These include key strategies to improve productivity, diversify markets and increase the contribution of strategic industries to GDP.

Similarly, in the social sphere, the government aims to improve health, expand educational opportunities, and establish a comprehensive social security system through community engagement and systemic reforms.

The government will further work on threat mitigation, disaster risk management, and protection of critical infrastructure, while enhancing Bhutan’s cultural identity and global reputation.

Good governance remains a key focus of the Government with measures being taken to transform the public sector into a dynamic and results-oriented entity.

This includes deploying data-driven policies, strengthening digital infrastructure, and improving the effectiveness of state institutions for transparent, citizen-centric governance.

The fiscal deficit for the 13th Five-Year Plan is expected to be Ngultrum 55.938 billion, equivalent to 2.97% of GDP.

External borrowing will be the main source of financing, with a focus on highly concessional funding from institutions such as the Asian Development Bank (ADB) and the World Bank (WB), the report said.

In addition, domestic funds will be raised through government bonds and treasury bills to achieve a balanced fiscal deficit strategy. According to the report, by the end of the 13th Five-Year Plan, the public debt is estimated to be 474,419.06 billion Ngultrum, accounting for about 94.8% of the projected GDP.

The majority of the debt, N392,673.04 billion, is external debt, of which hydropower debt accounts for 73.3% of the total external debt and non-hydropower debt accounts for 26.7% of the total external debt.

Likewise, domestic debt is estimated at N81,746.02 billion (17.2% of total public debt), and external debt is expected to decline from 92.9% to 78.5% of GDP by the end of the plan, with non-hydro external debt accounting for an estimated 21% of GDP.