Economy of Bhutan

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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  780,000 (2021)

GDP  $2.707 billion(nominal, 2022)

 $9.937 billion(PPP, 2022)

GDP rank 178th (nominal, 2022)

166th (PPP, 2022)

GDP growth -2.38% (fy21) -3.73% (fy22)

4.39% (fy23 est.) 4.5% (fy24 forecast)

GDP per capita  $3,562 (nominal, 2022)

 $13,077 (PPP, 2022)

GDP per capita rank 156th (nominal, 2022)

106th (PPP, 2022)

GDP by sector agriculture: 16.2%
 industry: 41.8%

services: 42%

(2017 est.)[3]
Inflation (CPI) 7.35% (2021)[4]
Population 8.2% (2017)[5]
below poverty line
 9.8% on less than $3.20/day (2020f)[6]
Gini coefficient 37.4 medium (2017, World Bank)[7]
Human Development  0.654 medium (2019)[8] (129th)
Index
 0.450 low IHDI (2018)[9]
Labor force  381,742 (2019)[10]

major shortage of skilled labour[3]

 61.6% employment rate (2015)[11]

Labor force by agriculture: 58%
occupation
industry: 20%

services: 22%

(2015 est.)[3]

Unemployment  3.2% (2017 est.)[3]

Main industries cement, wood products, processed fruits, alcoholic

beverages, calcium carbide, tourism

Ease-of-doing-business  89th (easy, 2020)[12]
rank

External

Exports  $554.6 million (2017 est.)[3]

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)[13]

Imports  $1.025 billion (2017 est.)[3]

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)[14]
FDI stock  $160.4 million (31 December 2017 est.)[3]

 Abroad: n/a
Current account  −$547 million (2017 est.)[3]
Gross external debt  $2.671 billion (31 December 2017 est.)[3]

Public finances
Public debt  106.3% of GDP (2017 est.)[3]
Budget balance −3.4% (of GDP) (2017 est.)[3]

Revenues 655.3 million (2017 est.)[3]

Expenses 737.4 million (2017 est.)[3][note 1]

Economic aid $985 million (India) (2015-16)

Foreign reserves  $970 million (August 2022)

Main data source: CIA World Fact Book

All values, unless otherwise stated, are in US dollars.

The economy of Bhutan 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. Bhutan is among the
richest by gross domestic product (nominal) per capita in South Asia, at $3,491 as of
2022, but it still places 153rd, and among the poorest in the world. The total gross
domestic product is only $2,653 million, and 178th according to IMF.
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. [15]
 Contents

 1Macro-economic trend
 2GNH versus GDP
 3See also
 4References
 5Further reading
 6External links

Macro-economic trend[edit]
Further information: Energy in Bhutan
This is a chart of trend of gross domestic product of Bhutan at market prices [1] by
the International Monetary Fund:

Year GDP (millions of BTN) GDP (millions of USD)

1985 2,166 175

1990 4,877 279

1995 9,531 294

2000 20,060 460

2005 36,915 828

2008 45,000 1280

2011 84,950 1695

2014 119,546 1784

2017 159,572 2294

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.[16]

GNH versus GDP[edit]

In the 1970s the King placed Gross National Happiness over Gross Domestic Product.[17]
[18]

See also[edit]
 Agriculture in Bhutan
 Banking in Bhutan
 Mining in Bhutan
 Fishing in Bhutan
 Forestry in Bhutan
 Bhutanese ngultrum, currency

References[edit]
Notes

1. ^ the Government of India finances nearly one-quarter of Bhutan's budget expenditures

Public domain

  This article incorporates public domain material from World Factbook. CIA.

  This article incorporates public domain material from U.S. Bilateral Relations Fact
Sheets. United States Department of State.
Citations

1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund.

Retrieved 29 September 2019.
2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29
September 2019.
3. ^ Jump up to:a b c d e f g h i j k l m "The World Factbook". CIA.gov. Central Intelligence Agency.
Retrieved 25 January 2019.
4. ^ "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund.
Retrieved 20 October 2019.
5. ^ "Poverty headcount ratio at national poverty lines (% of population) - Bhutan". data.worldbank.org.
World Bank. Retrieved 21 March 2020.
6. ^ "South Asia Economic Focus, Spring 2020 : The Cursed Blessing of Public
Banks". openknowledge.worldbank.org. World Bank. p. 92. Retrieved 14 April 2020.
7. ^ "GINI index (World Bank estimate)". data.worldbank.org. World Bank. Retrieved 25 January 2019.
8. ^ "Human Development Index (HDI)". hdr.undp.org. HDRO (Human Development Report
Office) United Nations Development Programme. Archived from the original on 14 August 2019.
Retrieved 11 December 2019.
9. ^ "Inequality-adjusted HDI (IHDI)". hdr.undp.org. UNDP. Retrieved 22 May 2020.
10. ^ "Labour force, total - Bhutan". data.worldbank.org. World Bank. Retrieved 5 March 2020.
11. ^ "Employment to population ratio, 15+, total (%) (national estimate) - Bhutan". data.worldbank.org.
World Bank. Retrieved 5 March 2020.
12. ^ "Ease of Doing Business in Bhutan". Doingbusiness.org. Retrieved 29 November 2017.
13. ^ "Export Partners of Bhutan". CIA World Factbook. 2015. Archived from the original on 13 June
2007. Retrieved 26 July 2016.
14. ^ "Import Partners of Bhutan". CIA World Factbook. 2015. Archived from the original on 13 June 2007.
Retrieved 26 July 2016.
15. ^ "1961 – First Five-Year Plan launched". Bhutan 2008. Archived from the original on 25 August 2011.
Retrieved 22 August 2011.
16. ^ "Selling and buying of tobacco products are no longer illegal in Bhutan". DailyBhutan. Retrieved 6
December 2021.
17. ^ Sharma, Lyonpo Loknath (25 October 2021). "What Bhutan got right about happiness - and what
other countries can learn". World Economic Forum. Retrieved 27 February 2022.
18. ^ "Bhutan's Gross National Happiness Index". Oxford Poverty & Human Development Initiative
(OPHI). University of Oxford. Retrieved 27 February 2022.