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Bhutan Economical Facts

 

Economical overview

Bhutan's economy is based on an ancient foundation of livestock farming and self-catering farming. Over the past two decades, the country has experienced rapid economic development, mainly through investments in tourism and hydropower for electricity exports.

The level of development has long been extremely low in Bhutan; by the mid-20th century, virtually everything associated with the modern world was missing. It was not until 1999 that a certain income tax was introduced and foreign investment was allowed. The development then accelerated, initially with money from electricity exports.

  • Countryaah.com: Major imports by Bhutan, covering a full list of top products imported by the country and trade value for each product category.

Starting in 1988, several large hydropower plants were built with the support of India, which imports the electricity that the Bhutanese themselves do not need. Electricity sales now account for almost 40 percent of export revenue. Bhutan is dependent on Indian rupees, which are earned from electricity sales, to be able to buy goods in the region.

The revenues from electricity sales have mainly been placed on poverty reduction (see Social conditions) and investments in infrastructure.

  • Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including RUB which represents the country of Bhutan.

Economical Facts of Bhutan

Gross National Happiness

In Bhutan, it is better to talk about the "gross national happiness", a royal coinage, than about the gross domestic product (GDP). It aims for economic development to take place in harmony with the environment and nature, and that spiritual and cultural needs are also taken into account.

The government uses five-year development plans. In the eleventh five-year plan 2013–2018, the focus was on green socio-economic development that benefits all residents and contributes to strengthening the country's independence. In the Twelfth Five-Year Plan 2018-2023, efforts were focused on poverty reduction, broadening the economic base for more industries, combating corruption, and investing in improved healthcare and education.

Growing tourism

Tourism has become an increasingly important source of income and the number of visitors has increased rapidly. Formerly regulated forms of tourism have gradually been relaxed. When Bhutan was opened for tourism in 1975, only 5,000 tourists a year were initially allowed to visit the country. Since then, the quota has increased steadily. In 2018, over 63,000 foreign visitors visited Bhutan.

The control over tourism is mainly to preserve the country's character and prevent environmental degradation. Tourists cannot travel anywhere or hike freely. Mountaineering is prohibited, as the mountains are considered sacred. The country's highest mountain Gangkhar Puensum (7,561 meters above sea level) thus has good chances to remain a candidate for the description as the world's highest unspecified peak.

Foreign trade increasingly important

India dominates completely as a trading partner; the only roads to and from Bhutan go to the neighbor to the south. With growing electricity exports, Bhutan hopes to reverse the deficit in foreign trade (ie the fact that the country imports more than it exports).

Other exports mainly consist of metal alloys and minerals, cement, agricultural products and wood. Machines and vehicles, oil products, metal products and foodstuffs are purchased from abroad.

A new trade route was inaugurated in 2010 to facilitate trade with Bangladesh. The distance between the two countries, through India, is just over 40 kilometers.

Together with the seven other members of Saarc, Bhutan has signed a free trade agreement, Safta (South Asian Free Trade Area). The agreement aims to gradually reduce customs duties and remove other barriers to trade between the countries. Bhutan applied for membership in the World Trade Organization (WTO) in 1999, but has yet to fully take the step and become a member.

Assistance, not least from India, also plays an important role in the economy.

FACTS - FINANCE

GDP per person

US $ 3,360 (2018)

Total GDP

US $ 2,535 million (2018)

GDP growth

2.3 percent (2018)

Agriculture's share of GDP

17.4 percent (2017)

Manufacturing industry's share of GDP

7.3 percent (2017)

The service sector's share of GDP

37.2 percent (2017)

Inflation

3.6 percent (2019)

Government debt's share of GDP

102.4 percent (2018)

External debt

US $ 2,636 million (2017)

Currency

Ngultrum

Merchandise exports

US $ 597 million (2018)

Imports

US $ 1,020 million (2018)

Current account

- US $ 498 million (2018)

Commodity trade's share of GDP

65 percent (2018)

Main export goods

electricity, metal alloys and minerals, cement

Largest trading partner

India

 

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