Bhutan Economy Profile 2008

Economy - overview

The economy, 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 had a major impact on growth in 2007.

GDP (purchasing power parity)

$3.503 billion (2006 est.)

GDP (official exchange rate)

$1.164 billion (2007 est.)

GDP - real growth rate

8.8% (2005 est.)

GDP - per capita (PPP)

$1,400 (2003 est.)

GDP - composition by sector

agriculture: 24.7%
industry: 37.2%
services: 38.1% (2005)

Population below poverty line

31.7% (2003)

Household income or consumption by percentage share

lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)

5.5% (2005 est.)

Labor force

NA
note: major shortage of skilled labor

Labor force - by occupation

agriculture: 63%
industry: 6%
services: 31% (2004 est.)

Unemployment rate

2.5% (2004)

Budget

revenues: $272 million
expenditures: $350 million
note: the government of India finances nearly three-fifths of Bhutan's budget expenditures (2005)

Public debt

81.4% of GDP (2004)

Industries

cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism

Industrial production growth rate

9.3% (1996 est.)

Electricity - production

2 billion kWh (2005)

Electricity - consumption

380 million kWh (2005)

Electricity - exports

1.5 billion kWh (2005)

Electricity - imports

20 million kWh (2005)

Oil - production

0 bbl/day (2005)

Oil - consumption

1,200 bbl/day (2005 est.)

Oil - imports

1,138 bbl/day (2004)

Oil - exports

0 bbl/day (2004)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

0 cu m (2005 est.)

Natural gas - consumption

0 cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

0 cu m (2005)

Natural gas - proved reserves

0 cu m (1 January 2006 est.)

Agriculture - products

rice, corn, root crops, citrus, foodgrains; dairy products, eggs

Exports

$350 million f.o.b. (2006)

Exports - commodities

electricity (to India), cardamom, gypsum, timber, handicrafts, cement, fruit, precious stones, spices

Exports - partners

India 54.5%, Hong Kong 34.6%, Bangladesh 6.9% (2006)

Imports

$320 million c.i.f. (2006)

Imports - commodities

fuel and lubricants, grain, aircraft, machinery and parts, vehicles, fabrics, rice

Imports - partners

India 76%, Japan 5.5%, Germany 3.2% (2006)

Debt - external

$593 million (2004)

Market value of publicly traded shares

$NA

Economic aid - recipient

$90.02 million; note - substantial aid from India (2005)

Currency (code)

ngultrum (BTN); Indian rupee (INR)

Exchange rates

ngultrum per US dollar - 41.487 (2007), 45.279 (2006), 44.101 (2005), 45.317 (2004), 46.583 (2003)
note: the ngultrum is pegged to the Indian rupee

Fiscal year

1 July - 30 June