BHUTAN

ECONOMICS


Bhutan's small economy is based largely on hydropower, agriculture, and forestry, which provide the main livelihood for more than half the population. Because rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive, industrial production is primarily of the cottage industry type. The economy is closely aligned with India's through strong trade and monetary links and is dependent on India for financial assistance and migrant laborers for development projects, especially for road construction. Bhutan signed a pact in December 2014 to expand duty-free trade with Bangladesh.
Multilateral development organizations administer most educational, social, and environment programs, and take into account the government's desire to protect the country's environment and cultural traditions. For example, the government is cautious in its expansion of the tourist sector, restricing visits to environmentally conscientious tourists. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment.
Bhutan’s largest export - hydropower to India - could spur sustainable growth in the coming years if Bhutan resolves chronic delays in construction. Bhutan’s hydropower exports comprise 40% of total exports and 25% of the government’s total revenue. Bhutan currently taps only 6.5% of its 24,000-megawatt hydropower potential and is behind schedule in building 12 new hydropower dams with a combined capacity of 10,000 megawatts by 2020 in accordance with a deal signed in 2008 with India. The high volume of imported materials to build hydropower plants has expanded Bhutan's trade and current account deficits. Bhutan also signed a memorandum of understanding with Bangladesh and India in July 2017 to jointly construct a new hydropower plant for exporting electricity to Bangladesh.

 

 

1990 2000 2010 2016
GNI, Atlas method (current US$) (billions) 0.31 0.44 1.43 2
GNI per capita, Atlas method (current US$) 580 770 1,970 2,510
GNI, PPP (current international $) (billions) 0.76 1.61 4.32 6.51
GNI per capita, PPP (current international $) 1,410 2,800 5,940 8,160
GDP (current US$) (billions) 0.3 0.44 1.59 2.21
GDP growth (annual %) 10.9 6.9 11.7 8
Inflation, GDP deflator (annual %) 5.7 2.3 6 4.2
Agriculture, forestry, and fishing, value added (% of GDP) 34 27 17 17
Industry (including construction), value added (% of GDP) 24 35 43 41
Exports of goods and services (% of GDP) 27 29 42 30
Imports of goods and services (% of GDP) 31 48 71 53
Gross capital formation (% of GDP) 30 49 62 56
Revenue, excluding grants (% of GDP) 17 22.9 21.5 18.9
Net lending (+) / net borrowing (-) (% of GDP) -5.8 -2.4 2 1.4
States and markets
Time required to start a business (days) .. 62 46 15
Domestic credit provided by financial sector (% of GDP) -1 2.9 45.6 53.5
Tax revenue (% of GDP) 4.4 10 13.1 13.2
Military expenditure (% of GDP) .. .. .. ..
Mobile cellular subscriptions (per 100 people) 0 0 54.2 87.5
Individuals using the Internet (% of population) 0 0.4 13.6 41.8
High-technology exports (% of manufactured exports) .. 0 0 ..
Statistical Capacity score (Overall average) .. .. 76 69
Global links
Merchandise trade (% of GDP) 50 63 94 69
Net barter terms of trade index (2000 = 100) .. 100 132 114
External debt stocks, total (DOD, current US$) (millions) 84 212 935 2,348
Total debt service (% of exports of goods, services and primary income) .. .. 14.4 11.6
Net migration (thousands) -86 29 10 0
Personal remittances, received (current US$) (millions) .. .. 8 34
Foreign direct investment, net inflows (BoP, current US$) (millions) 2 1 75 8
Net official development assistance received (current US$) (millions) 46 53.4 131.4 51.5