Bhutan is projected to become an ageing society by 2028, with over seven percent of its population expected to be over 65 years old, according to the World Bank’s latest report on demographic change in South Asia. The report cautions that South Asian nations, including Bhutan, are experiencing rapid demographic ageing before reaching high-income status, creating immense pressure on their national economies and social service infrastructure. With Bhutan’s working-age population expected to peak around 2031, economic growth could slow significantly thereafter as the proportion of active workers shrinks while the number of older dependents steadily expands. This impending shift poses substantial challenges for the government in funding social pensions, building long-term care systems, and delivering adequate healthcare to an expanding elderly demographic. To mitigate these risks, the World Bank emphasizes the urgent need to expand private enterprise and boost female workforce participation, noting that 75 percent of currently employed citizens work in government-related jobs while only 16 percent are engaged in the private sector. Furthermore, one in three young women aged 15 to 24 remains outside employment, education, or training due to family obligations. The labor market is further complicated by the fact that regular salaried employees account for merely 34 percent of Bhutan’s workforce, leaving the remainder informally employed without regulatory protections or contributory pension coverage. Because Bhutan stands as the sole country in South Asia without a formal non-contributory social pension system—relying instead on its traditional Kidu system to support citizens in need—the World Bank recommends introducing government-funded social pensions tailored for vulnerable seniors without formal contribution histories. Additionally, the international financial institution advises bolstering community health centers and establishing formal certification programs for caregivers and geriatric nurses to ensure quality care. Ultimately, as Bhutan moves toward becoming an ageing society, its central economic challenge will lie in building robust social protections, expanding private job creation, and sustaining growth while caring for an aging populace.
