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.
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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.
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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.
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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