The Asian Development Bank (ADB) has approved $17.42 million to help Bhutan protect vulnerable families from rising food and energy costs and maintain essential public services as the Middle East conflict puts pressure on the country’s economy.
“In Bhutan, every family feels the consequences of rising fuel prices, but it is the poorest households who are most impacted,” said ADB President Masato Kanda. “Higher import costs work their way through the economy, stretching household budgets and public finances. Bhutan is responding with measures that reach into everyday life, from school meals to assistance with household bills. ADB is helping the government preserve the services people depend on.”
The financing supports the Government of Bhutan’s $267.88 million Anti-Crisis Action Plan, a government expenditure program designed to mitigate the economic impact of the Middle East conflict. ADB’s support, provided through the Enhancing Resilience with Countercyclical Expenditures Program, includes a $13.45 million grant from the Asian Development Fund and a $3.97 million loan from ADB’s ordinary capital resources.
Bhutan is particularly vulnerable to the impact of conflict because of its dependence on imported food and fuel and its limited domestic revenue sources. Higher fuel and commodity prices have disrupted trade and industries such as tourism, slowing economic growth and increasing unemployment and poverty. ADB expects growth to slow from 8.5% in 2025 to 6.5% in 2026 before recovering to 7.2% in 2027.
The program will provide women in eligible large families with monthly assistance up to 10,000 ngultrum ($104) and subsidize household energy bills in rural areas. It will also expand school feeding programs to ensure children receive nutritious meals.
To help stabilize prices and keep essential goods affordable, the program will expand tax exemptions on basic foods, including butter, rice, refined oil, and salt, as well as other necessities such as wheelchairs and sanitary napkins.
Small-scale public works will help maintain employment and the delivery of essential services in Bhutan’s districts and subdistricts. The program will also help replenish fuel storage facilities and encourage greater use of electric transport, including the procurement of 45 electric buses for urban and interdistrict services.
The financing is part of ADB’s wider response to the economic effects of the Middle East conflict across Asia and the Pacific.
ADB’s multi-donor-financed Asian Development Fund supports countries most in need to meet today’s challenges while building the foundations for lasting growth.
ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.
Staff Reporter
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