ADB Approves $17.4 Million to Support Bhutan Amid Middle East Conflict Pressures

The Asian Development Bank (ADB) approved $17.42 million on October 23, 2026, to assist Bhutan in shielding vulnerable families from increasing food and energy expenses and preserving public services amid economic pressures linked to conflict in the Middle East.

The financing contributes to the Government of Bhutan's $267.88 million Anti-Crisis Action Plan through the Enhancing Resilience with Countercyclical Expenditures Program. The package consists of a $13.45 million grant from the Asian Development Fund and a $3.97 million loan from ADB's ordinary capital resources.

According to the ADB, Bhutan faces economic vulnerability due to its reliance on imported food and fuel combined with limited domestic revenue sources. Higher fuel and commodity prices have affected trade and sectors such as tourism, leading to increased unemployment and poverty. The ADB forecasts Bhutan's economic growth to decline from 8.5% in 2025 to 6.5% in 2026, before rising to 7.2% in 2027.

Under the program, monthly assistance of up to 10,000 ngultrum ($104) will be provided to women in eligible large families, alongside subsidies for rural household energy bills. The initiative will also expand school feeding programs and broaden tax exemptions on basic food items—such as rice, butter, refined oil, and salt—as well as essential goods like sanitary napkins and wheelchairs.

Additionally, the initiative includes funding for small-scale public works across Bhutan's districts and subdistricts, the replenishment of fuel storage facilities, and the procurement of 45 electric buses for urban and interdistrict transit to support electric transport adoption.

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