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. 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 6.9% (1995 est.)

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

GDP - composition by sector
agriculture: 42%
industry: 32%
services: 26% (1995 est.)

Inflation rate - consumer price index 7% (FY96/97 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: $146 million
expenditures: $152 million, including capital expenditures of $94 million (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 7.6% (1992 est.)

Electricity - capacity 361,000 kW (1995)

Electricity - production 1.707 billion kWh (1995)
note: exports electricity to India

Electricity - consumption per capita 143 kWh (1995)

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

Exports
total value: $77.4 million (f.o.b., 1996 est.)
commodities: cardamom, gypsum, timber, handicrafts, cement, fruit, electricity (to India), precious stones, spices
partners: India 94%, Bangladesh

Imports
total value: $104.1 million (c.i.f., 1996 est.)
commodities: fuel and lubricants, grain, machinery and parts, vehicles, fabrics, rice
partners: India 77%, Japan, UK, Germany, US

Debt - external $129 million (FY94/95)

Economic aid
recipient: $NA

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

NOTE: The information regarding Bhutan on this page is re-published from the 1998 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Bhutan Economy 1998 information contained here. All suggestions for corrections of any errors about Bhutan Economy 1998 should be addressed to the CIA.