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Bhutan Economy

Bhutan Economy

Economy

Bhutan's economy is based mainly on agriculture, and forestry which provide the main livelihood for 80% of the population and account for about 40% of GDP. Bhutan is a sparsely populated land of some 700,000 inhabitants, spread out over the inaccessible and inhospitable mountainous landscape in miniature agrarian settlements. Within what essentially remains a traditional framework, individual units come together to compose a loosely linked social collage. The Bhutanese economy is significantly underdeveloped in keeping with the Kingdom's late entry to the modern world. The state will continue to play a central role as Bhutan's economy undergoes major structural transformations.

The Government of Bhutan gets most of its revenue from selling hydroelectric power to India. Chhukha Hydroelectric Power Corporation supplies elecricity to the northern states of India. There are two more huge hydro-electric power projects, Tala and Kurichhu, under construction at this time. After their completion, it is hoped that our revenues will be further increased. Other sources of revenue include tourism and minerals like coal, gypsum, cement production and ferro-chemicals.

Agriculture consists largely of subsistence farming and animal husbandry. Agriculture and forestry provide the main means of livelihood for over 60% of the population.

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.

GDP growth averaged 5% per year in 1991-95 with information not yet available for 1996-97. Detailed controls and uncertain policies in areas like industrial licensing trade labor and finance continue to hamper foreign investment.

GDP: purchasing power parity—$1.3 billion (1995 est.)
GDP—real growth rate: 21.4% (2008 est.)
GDP—per capital: purchasing power parity—$730 (1995 est.)
GDP—composition by sector:

Agriculture: 42%

Industry: 32%

Services: 26% (1995 est.)

Budget: Income ............ $146 million

Expenditure ...$152 million

Main Crops: Rice, corn, root crops, citrus, foodgrains; dairy products, eggs

Natural Resources: Timber, hydropower, gypsum, calcium carbide

Major Industries: Cement, wood products, processed fruits, alcoholic beverages, calcium carbide

Electricity-capacity: 361 000 kW (1995)

Electricity-production: 1.707 billion kWh (1995)

Note: exports electricity to India

Electricity-consumption per capital: 143 kWh (1995)

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

Exports: $77.4 million (f.o.b. 1996 est.)

Commodities: cardamom gypsum timber handicrafts cement fruit electricity (to India) precious stones spices

Imports: $104.1 million (c.i.f. 1996 est.)

Commodities: fuel and lubricants grain machinery and parts vehicles fabrics rice

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

Exchange rates: ngultrum (Nu) per US$1—39.358 (January 1998) 36.313 (1997) 35.433 (1996) 32.427 (1995) 31.374 (1994) 30.493 (1993); note—the Bhutanese ngultrum is at par with the Indian rupee

Fiscal year: 1 July—30 June

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