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 90% of the population and account for about 40% 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 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. 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. Detailed controls and uncertain policies in areas like industrial licensing, trade, labor, and finance continue to hamper foreign investment.

GDP: purchasing power parity—$1.9 billion (1998 est.)

GDP—real growth rate: 6.5% (1998 est.)

GDP—per capita: purchasing power parity—$1,000 (1998 est.)

GDP—composition by sector:
agriculture: 38%
industry: 38%
services: 24% (1997)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 7.4% (1997 est.)

Labor force: NA
note: massive lack of skilled labor

Labor force—by occupation: agriculture 93%, services 5%, industry and commerce 2%

Unemployment rate: NA%

Budget:
revenues: $146 million
expenditures: $152 million, including capital expenditures of $NA (FY95/96 est.)
note: the government of India finances nearly three-fifths of Bhutan's budget expenditures

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

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

Electricity—production: 1.717 billion kWh (1996)
note: exports electricity to India

Electricity—production by source:
fossil fuel: 0.41%
hydro: 99.59%
nuclear: 0%
other: 0% (1996)

Electricity—consumption: 246 million kWh (1996)

Electricity—exports: 1.475 billion kWh (1996)

Electricity—imports: 4 million kWh (1996)

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

Exports: $99 million (f.o.b., 1997 est.)

Exports—commodities: cardamom, gypsum, timber, handicrafts, cement, fruit, electricity (to India), precious stones, spices

Exports—partners: India 94%, Bangladesh

Imports: $131 million (c.i.f., 1997 est.)

Imports—commodities: fuel and lubricants, grain, machinery and parts, vehicles, fabrics, rice

Imports—partners: India 77%, Japan, UK, Germany, US

Debt—external: $87 million (1996)

Economic aid—recipient: $73.8 million (1995)

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

Exchange rates: ngultrum (Nu) per US$1—42.508 (January 1999), 41.259 (1998), 36.313 (1997), 35.433 (1996), 32.427 (1995), 31.374 (1994); note—the Bhutanese ngultrum is at par with the Indian rupee

Fiscal year: 1 July—30 June