Bhutan has made significant economic progress under the 13th Five Year Plan, with GDP increasing by 30% from Nu. 280 billion to Nu. 364 billion and a projected budget surplus of Nu. 20 billion. Investments in hydropower, agriculture, tourism, education, healthcare, and digital transformation have strengthened the country’s development trajectory.
However, the State of the Nation Report 2026 highlights a growing concern: Bhutan’s shrinking and ageing population. Prime Minister Tshering Tobgay described continued outmigration as the country’s “greatest national risk” and an “existential crisis.” More than 71,000 Bhutanese, mostly young and skilled workers, are currently employed overseas. While remittances contributed nearly USD 343 million to the economy in 2025, the loss of human capital raises concerns about Bhutan’s future workforce and economic sustainability.
At the same time, Bhutan is experiencing declining birth rates. The country’s fertility rate has fallen below the replacement level of 2.1 children per woman, and annual births have dropped by 26% over the past decade. These trends, combined with migration and population ageing, could reduce the working-age population and place greater pressure on public services and rural communities.
To address these challenges, the government has introduced the Third Child Plus Programme and expanded youth skills training, employment opportunities, and investment initiatives. Nevertheless, the report emphasizes that long-term success of major projects such as the Gelephu Mindfulness City and the 10X Economic Roadmap will depend on retaining and developing a strong workforce.
The report concludes that Bhutan’s future challenge is not only achieving economic growth but ensuring there are enough people to sustain and benefit from that growth in the decades ahead.
June 23, 2026. RENUKA RAI | Thimphu
