Economy Overview
Bhutan's economy, small and less developed, is based largely on hydropower, agriculture, and forestry, which provide the main livelihood for more than half of the population. Because rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive, industrial production is primarily of the cottage industry type. The economy is closely aligned with India's through strong trade and monetary links and is dependent on India for financial assistance and migrant laborers for development projects, especially for road construction. Multilateral development organizations administer most educational, social, and environment programs, and take 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. Complicated controls and uncertain policies in areas such as industrial licensing, trade, labor, and finance continue to hamper foreign investment. Bhutan’s largest export - hydropower to India - could spur sustainable growth in the coming years if Bhutan resolves chronic delays in construction. Bhutan currently taps only 5% of its 30,000-megawatt hydropower potential and is behind schedule in building 12 new hydropower dams with a combined capacity of 10,000 megawatts by 2020 in accordance with a deal signed in 2008 with India. The high volume of imported materials to build hydropower plants has expanded Bhutan's trade and current account deficits. However, Bhutan and India in April 2014 agreed to begin four additional hydropower projects, which would generate 2,120 megawatts in total. A declining GDP growth rate in each of the past three years in the absence of new hydropower facilities has constrained Bhutan’s ability to institute economic reforms. Bhutan inked a pact in December 2014 to expand duty-free trade with Bangladesh, the only trade partner with which Bhutan enjoys a surplus.
Agriculture Products
rice, corn, root crops, citrus; dairy products, eggs
Industries
cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism
Industrial Production Growth Rate
8% (2014 est.)
Labor Force by Occupation
Agriculture: 56%
Industry: 22%
Services: 22% (2013 est.)
Unemployment Rate
2.1% (2012 est.)
Population Below Poverty Line
12% (2012 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: 2.3%
Highest 10%: 37.6% (2003)
Distribution of Family Income Gini Index
38.1 (2007)
Budget
Revenues: $407.1 million
Expenditures: $614 million
Note: the government of India finances nearly one-quarter of Bhutan's budget expenditures (2014 est.)
Public Debt
97% of GDP (2013 est.)
Central Bank Discount Rate
NA%
Commercial Bank Prime Lending Rate
Stock of Narrow Money
$550.6 million (31 December 2013 est.)
Stock of Broad Money
$1.062 billion (31 December 2012 est.)
Stock of Domestic Credit
$726.2 million (31 December 2013 est.)
Market Value of Publicly Traded Shares
$283.4 million (31 December 2012)
Reserves of Foreign Exchange and Gold
Debt External
$1.578 billion (31 December 2013 est.)
Stock of Direct Foreign Investment at Home
$131.7 million (31 December 2013 est.)
Stock of Direct Foreign Investment Abroad
Exchange Rates
45.73 (2010 est.)
