Economy of Bhutan

Economy of Bhutan

Thimphu is the largest economic centre of Bhutan
Currency	ngultrum (BTN)
Fiscal year	1 July – 30 June
Trade organizations	SAFTA
Country group	Developing/Emerging[1] Lower middle income economy[2]
Statistics
Population	754,394 (2018)[3]
GDP	$2.842 billion(nominal, 2019 est.)[4] $8.199 billion(PPP, 2019 est.)[4]
GDP rank	161st (nominal, 2019) 154th (PPP, 2019)
GDP growth	3.8% (17/18) 3.9% (18/19e) 1.5% (19/20f) 1.8% (20/21f)[5]
GDP per capita	$3,280 (nominal, 2020)[4] $9,876 (PPP, 2019 est.)[4]
GDP per capita rank	120th (nominal, 2019) 106th (PPP, 2019)
GDP by sector	agriculture: 16.2% industry: 41.8% services: 42% (2017 est.)[6]
Inflation (CPI)	4.2% (2020 est.)[4]
Population below poverty line	8.2% (2017)[7] 9.8% on less than $3.20/day (2020f)[8]
Gini coefficient	37.4 medium (2017, World Bank)[9]
Human Development Index	0.617 medium (2018)[10] (134th) 0.450 low IHDI (2018)[11]
Labor force	381,742 (2019)[12] major shortage of skilled labour[6] 61.6% employment rate (2015)[13]
Labor force by occupation	agriculture: 58% industry: 20% services: 22% (2015 est.)[6]
Unemployment	3.2% (2017 est.)[6]
Main industries	cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism
Ease-of-doing-business rank	89th (easy, 2020)[14]
External
Exports	$554.6 million (2017 est.)[6]
Export goods	electricity (to India), ferrosilicon, cement, cardamom, calcium carbide, steel rods/bars, dolomite, gypsum
Main export partners	India 81.1%  Bangladesh 6.4%  Hong Kong 5.8%  China 3.8%    Nepal 2.9% (2013)[15]
Imports	$1.025 billion (2017 est.)[6]
Import goods	fuel and lubricants, airplanes, machinery and parts, rice, motor vehicles
Main import partners	India 78.3%  China 6%  Japan 3.8%  South Korea 3.4%  Thailand 2.6%  Singapore 2.6% (2013)[16]
FDI stock	$160.4 million (31 December 2017 est.)[6] Abroad: n/a
Current account	−$547 million (2017 est.)[6]
Gross external debt	$2.671 billion (31 December 2017 est.)[6]
Public finances
Public debt	106.3% of GDP (2017 est.)[6]
Budget balance	−3.4% (of GDP) (2017 est.)[6]
Revenues	655.3 million (2017 est.)[6]
Expenses	737.4 million (2017 est.)[6][note 1]
Economic aid	$985 million (India) (2015-16)
Foreign reserves	$1.206 billion (31 December 2017 est.)[6]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars.

The economy of Bhutan, one of the world's smallest and least developed countries, is based on agriculture and forestry, which provide the main livelihood for more than 60% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive.

Bhutan's economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. Most production in the industrial sector is of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labour. Model education, social, and environment programs are underway with support from multilateral development organisations.

Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Detailed controls and uncertain policies in areas such as industrial licensing, trade, labour, and finance continue to hamper foreign investment. Hydropower exports to India have boosted Bhutan's overall growth, even though GDP fell in 2008 as a result of a slowdown in India, its predominant export market.

Since 1961, the government of Bhutan has guided the economy through five-year plans in order to promote economic development.^[17]

Macro-economic trend[]

This is a chart of trend of gross domestic product of Bhutan at market prices [1] by the International Monetary Fund:

Bhutan's hydropower potential and its attraction for tourists are key resources. The Bhutanese Government has made some progress in expanding the nation's productive base and improving social welfare.

In 2010, Bhutan became the first country in the world to ban smoking and the selling of tobacco. In order to stamp out cross-border smuggling during the pandemic, a new Tobacco Control Rules and Regulations (TCRR) 2021 allowed the import, sales and consumption of tobacco products.^[18]

See also[]

• Agriculture in Bhutan
• Banking in Bhutan
• Mining in Bhutan
• Fishing in Bhutan
• Forestry in Bhutan
• Bhutanese ngultrum, currency

References[]

•  This article incorporates public domain material from the CIA World Factbook website https://www.cia.gov/the-world-factbook/.
•  This article incorporates public domain material from the United States Department of State website https://www.state.gov/countries-areas/. (U.S. Bilateral Relations Fact Sheets)

External links[]

• Global Economic Prospects: Growth Prospects for South Asia The World Bank, 13 December 2006

Notes[]