Economy of Bhutan

Economy of Bhutan
Rank	169th
Currency	ngultrum (BTN); Indian rupee (INR)
Fiscal year	1 July - 30 June
Trade organizations	SAFTA
Statistics
GDP	$3.789 billion (2008 est.)
GDP growth	6.6% (2008 est.)
GDP per capita	$5,600 (2008 est.)
GDP by sector	agriculture: 22.3%, industry: 37.9%, services: 39.8% (2006)
Inflation (CPI)	4.9% (2007 est.)
Population below poverty line	31.7% (2003)
Gini coefficient	no data
Labor force	no data (major shortage of skilled labor)
Labor force by occupation	agriculture: 63%, industry: 6%, services: 31% (2004 est.)
Unemployment	2.5% (2004)
Main industries	cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism
Ease of Doing Business Rank	142nd
External
Exports	$350 million f.o.b. (2006)
Export goods	electricity (to India), cardamom, gypsum, timber, handicrafts, cement, fruit, precious stones, spices
Main export partners	India 58.6%, Hong Kong 30.1%, Bangladesh 7.3% (2007)
Imports	$320 million c.i.f. (2006)
Import goods	fuel and lubricants, grain, aircraft, machinery and parts, vehicles, fabrics, rice
Main import partners	India 74.5%, Japan 7.4%, Sweden 3.2% (2007)
Public finances
Public debt	$713.3 million (2006)
Revenues	$272 million (2005)
Expenses	$350 million (India finances 3/5 of Bhutan's expenditures) (2005)
Economic aid	$90.02 million (India) (2005)
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, 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. The economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. The industrial sector is technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor. Model education, social, and environment programs are underway with support from multilateral development organizations. 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, labor, 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.

Macro-economic trend

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		1280

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. Model education, social, and environment programs in Bhutan are underway with support from multilateral development organizations. 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 such areas as industrial licensing, trade, labor, and finance continue to hamper foreign investment.

In 2004, Bhutan became the first country in the world to ban smoking and the selling of tobacco.

Other statistics

Industrial production growth rate: 9.3% (1996 est.)

Electricity:

• production: 2 TWh (2005)
• consumption: 380 GWh (2005)
• exports: 1.5 TWh (2005) (exports electricity to India)
• imports: 20 GWh (2005)

Electricity - production by source:

• fossil fuel: 0.39%
• hydro: 99.61%
• nuclear: 0%
• other: 0% (1998)

Oil:

• production: 0 barrels per day (0 m³/d) (2005)
• consumption: 1,200 barrels per day (190 m³/d) (2005 est.)
• exports: 0 barrels per day (0 m³/d) (2004)
• imports: 1,138 barrels per day (180.9 m³/d) (2004)

Agriculture - products: rice, corn, root crops, citrus, foodgrains, dairy products, eggs

Currency: 1 ngultrum (BTN) = 100 chetrum; Indian rupee (INR) is also legal tender

Historic exchange rates:

	2006	2005	2004	2003	2002	2001	1999
Ngultrum per US$1	45.279	44.101	45.317	46.583	48.61	47.186	43.055

References

•  This article incorporates public domain material from websites or documents of the CIA World Factbook.
•  This article incorporates public domain material from websites or documents of the United States Department of State (Background Notes).

External links

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