Bhutan

Bhutan has made significant strides in improving per capita incomes and reducing poverty, with growth strong and inflation in single digits. While still large, external imbalances are declining. Welcome progress has also been made on structural reforms. Key medium-term policy challenges include the mobilization of domestic revenues and prudent management of hydropower revenues to support adequate levels of public spending, while maintaining macroeconomic stability, and enhancing competitiveness and diversifying the sources of growth.