Bhutan Economy 1997

Economy - overview The economy, one of the world's smallest and least developed, is basedon agriculture and forestry, which provide the main livelihood for 90% ofthe population and account for about 40% of GDP. Agriculture consists largelyof subsistence farming and animal husbandry. Rugged mountains dominate theterrain and make the building of roads and other infrastructure difficultand expensive. The economy is closely aligned with India's through strong trade and monetary links. The industrial sector is small and technologicallybackward, with most production of the cottage industry type. Most developmentprojects, such as road construction, rely on Indian migrant labor. Bhutan'shydropower potential and its attraction for tourists are key resources; however,the government limits the number of tourists to 4,000 per year to minimizeforeign influence. The Bhutanese Government has made some progress in expandingthe nation's productive base and improving social welfare, but growth continuesto be constrained by the government's desire to protect the country's environmentand cultural traditions. Growth picked up in 1995 and the country's balanceof payments remained strong with comfortable reserves. The cautious fiscalstance planned for FY95/96 suggests continued economic stability in 1996.However, excessive controls and uncertain policies in areas like industriallicensing, trade, labor, and finance continue to hamper foreign investment.

GDP purchasing power parity - $1.3 billion (1995 est.)

GDP - real growth rate 6.9% (1995 est.)

GDP - per capita purchasing power parity - $730 (1995 est.)

GDP - composition by sector
agriculture: 42%
industry: 31%
services : 27%

Inflation rate - consumer price index 8.6% (FY94/95 est.)

Labor force NA
by occupation : agriculture 93%, services 5%, industry and commerce 2%
note: massive lack of skilled labor

Unemployment rate NA%

Budget
revenues: $52 million
expenditures: $150 million, including capital expenditures of $95 million (FY93/94est.)
note: the government of India finances nearly three-fifths of Bhutan's budgetexpenditures

Industries cement, wood products, processed fruits, alcoholic beverages, calciumcarbide

Industrial production growth rate 7.6% (1992 est.)

Electricity - capacity 351,000 kW (1989)

Electricity - production 1.67 billion kWh (1994)
note: exports electricity to India

Electricity - consumption per capita 79 kWh (1995 est.)

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

Exports
total value: $70.9 million (f.o.b., FY94/95 est.)
commodities: cardamom, gypsum, timber, handicrafts, cement, fruit, electricity (toIndia), precious stones, spices
partners: India 94%, Bangladesh

Imports
total value: $113.6 million (c.i.f., FY94/95 est.)
commodities : fuel and lubricants, grain, machinery and parts, vehicles, fabrics,rice
partners: India 77%, Japan, UK, Germany, US

Debt - external $141 million (October 1994)

Economic aid
recipient: $NA

Currency 1 ngultrum (Nu) = 100 chetrum; note - Indian currency is also legaltender

Exchange rates ngultrum (Nu) per US$1 - 35.872 (January 1997), 35.433 (1996), 32.427(1995), 31.374 (1994), 30.493 (1993), 25.918 (1992); note - the Bhutanese ngultrum is at par with the Indian rupee

Fiscal year 1 July - 30 June

NOTE: The information regarding Bhutan on this page is re-published from the 1997 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Bhutan Economy 1997 information contained here. All suggestions for corrections of any errors about Bhutan Economy 1997 should be addressed to the CIA.