macroeconomic outlook role of financial sectors in … 1 session...securities brokers pension fund...
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Macroeconomic OutlookRole of financial sectors in Bhutan.
TSHERING DHENDUPDMRSROYAL MONATERY AUTHORITY OF BHUTAN11th December, 2018
Financial Sector StructureRoyal Monetary Authority
Banks
BoB
BNB
BDB
Druk PNB
T Bank
Insurance Companies
RICB
BIL
GIC Bhutan Re
Capital Markets
RSEB
Securities Brokers
Pension Fund
NPPF
2
Macroeconomic Outlook
REAL SECTOR
• Unfavorable hydrological flows for electricity generation(3.8%)
• Decrease in hydropower construction activities(13.3% to 6.3%)
INFLATON
BALANCE OF PAYMENT
• In 2017/18, current account deficit 19.02 % of GDP. (Nu.31,306.95 million)
• As compared to 2016/17 24.23 % of GDP (Nu .36,142.83 million)
• Narrowing deficit in trade‐in‐goods• Merchandise exports (5.39%)• merchandise imports(3.24%)
• Gross Intl. Reserve ‐ USD 1,110.91 million as of June 2018, sufficient to finance 13 months of merchandised import
CREDIT MARKET
• Total credit Nu. 107,720.41 million by FIs (June 2018).•13.32%
•The continues reliance on credit from the Fis ---increasing trend.
•Majority of the FI credit was concentrated in Housing (23.58%) followed by Service and Tourism (23.06% ) and Trade in Commerce with (13.96%)
ROLE OF FINANCIAL SECTOR IN BHUTAN
1. Mobilization of savings 2.Link between savings & investment3. Liquidity4.Transfer of risk5. Employment
ROLE OF FINANCIAL SECTOR IN BHUTAN
6. Financing the key sectors in the economy.
Points for consideration?
Points ‐ Development of the Capital Market
‐ Maintaining External Stability(credit concentration)
‐ Priority Sector Lending (PSL) – CSI sector • Five economic Jewels
• Boost domestic production/reduce dependency on imports• Coordination of several Government agencies• Role of FS‐ collective commitment for better financing• Catalyze the CSI sector into growth driver.
‐ Alternate source of financing (CF,AI)
‐ Interbank borrowing
‐ Financial Literacy (NFLS 2018‐2023)
‐ Compliance to regulatory requirement
Thank you!