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Bhutan Economy 1996

Overview:

The economy, one of the world's least developed, is based on agriculture and forestry, which provide the main livelihood for 90% of the population and account for about half of GDP. 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. The industrial sector is small and technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor. Bhutan's hydropower potential and its attraction for tourists are key resources; however, the government limits the number of tourists to 4,000 per year to minimize foreign influence. Much of the impetus for growth has come from large public-sector companies. Nevertheless, in recent years, Bhutan has shifted toward decentralized development planning and greater private initiative. The government privatized several large public-sector firms, is revamping its trade regime and liberalizing administerial procedures over industrial licensing. The government's industrial contribution to GDP decreased from 13% in 1988 to about 11% in 1993.

National product:

GDP - purchasing power parity - $1.2 billion (1994 est.)

National product real growth rate:

5% (1994 est.)

National product per capita:

$700 (1994 est.)

Inflation rate (consumer prices):

10% (October 1994)

Unemployment rate:

NA%

Budget:

revenues:

$52 million

expenditures:

$150 million, including capital expenditures of $95 million (FY93/94 est.)

note:

the government of India finances nearly three-fifths of Bhutan's budget expenditures

Exports:

$66.8 million (f.o.b., FY93/94)

commodities:

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

partners:

India 87%, Bangladesh

Imports:

$97.6 million (c.i.f., FY93/94 est.)

commodities:

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

partners:

India 79%, Japan, UK, Germany, US

External debt:

$141 million (October 1994)

Industrial production:

growth rate 7.6% (1992 est.); accounts for 18% of GDP; primarily cottage industry and home based handicrafts

Electricity:

capacity:

360,000 kW

production:

1.7 billion kWh

consumption per capita:

143 kWh (1993)

note:

Bhutan exports electricity to India

Industries:

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

Agriculture:

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

Economic aid:

recipient:

Western (non-US) countries, ODA and OOF bilateral commitments (1970-89), $115 million; OPEC bilateral aid (1979-89), $11 million

Currency:

1 ngultrum (Nu) = 100 chetrum; note - Indian currency is also legal tender

Exchange rates:

ngultrum (Nu) per US$1 - 31.374 (January 1995), 31.374 (1994), 30.493 (1993), 25.918 (1992), 22.742 (1991), 17.504 (1990); note - the Bhutanese ngultrum is at par with the Indian rupee

Fiscal year:

1 July - 30 June

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