Bhutan Economy - 2005

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 90% 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. Bhutan's hydropower potential and its attraction for tourists are key resources. 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 like industrial licensing, trade, labor, and finance continue to hamper foreign investment.

GDP:
purchasing power parity - $2.9 billion (2003 est.)

GDP - real growth rate:
5.3% (2003 est.)

GDP - per capita:
purchasing power parity - $1,400 (2003 est.)

GDP - composition by sector:
agriculture: 45%
industry: 10%
services: 45% (2002 est.)

Labor force:
NA
note: massive lack of skilled labor

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

Unemployment rate:
NA

Population below poverty line:
NA

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

Inflation rate (consumer prices):
3% (2002 est.)

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

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

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

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

Electricity - production:
2.001 billion kWh (2002)

Electricity - consumption:
312.9 million kWh (2002)

Electricity - exports:
1.56 billion kWh (2002)

Electricity - imports:
12 million kWh (2002)

Oil - production:
0 bbl/day (2001 est.)

Oil - consumption:
1,020 bbl/day (2001 est.)

Oil - exports:
NA

Oil - imports:
NA

Exports:
$154 million f.o.b. (2000 est.)

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

Exports - partners:
India 87.9%, Bangladesh 4.6%, Philippines 2% (2004)

Imports:
$196 million c.i.f. (2000 est.)

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

Imports - partners:
India 71.3%, Japan 7.8%, Austria 3% (2004)

Debt - external:
$245 million (2000)

Economic aid - recipient:
substantial aid from India and other nations

Currency (code):
ngultrum (BTN); Indian rupee (INR)

Exchange rates:
ngultrum per US dollar - 45.317 (2004), 46.583 (2003), 48.61 (2002), 47.186 (2001), 44.942 (2000)