View source for Economy of Bhutan

{{Short description|none}}
{{Use Indian English|date=July 2016}}
{{Use dmy dates|date=September 2024}}
{{Infobox economy
| country = Bhutan
| image = Thimpu Bazar 31.JPG
| image_size = 310px
| caption = Thimphu is the largest economic centre of Bhutan.
| currency = [[ngultrum]] (BTN)<br>[[Indian rupee]] (INR)
| year = 1 July – 30 June
| organs = [[South Asian Free Trade Area|SAFTA]]
| group = {{plainlist|
*[[Developing country|Developing/Emerging]]<ref>{{cite web |url=https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/weoselco.aspx?g=2200&sg=All+countries+%2f+Emerging+market+and+developing+economies |title=World Economic Outlook Database, April 2019 |publisher=[[International Monetary Fund]] |access-date=29 September 2019}}</ref>
*Lower middle income economy<ref>{{cite web |url=https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups |title=World Bank Country and Lending Groups |publisher=[[World Bank]] |access-date=29 September 2019}}</ref>}}
| population = {{increase}} 780,000 (2021)
| gdp = {{plainlist|
*{{increase}} $2.707 billion(nominal, 2022)
*{{increase}} $9.937 billion([[Purchasing power parity|PPP]], 2022)}}
| gdp rank = {{plainlist|
*[[List of countries by GDP (nominal)|178th (nominal, 2022)]]
*[[List of countries by GDP (PPP)|166th (PPP, 2022)]]}}
| growth = {{plainlist|
*-2.38%&nbsp;(fy21) -3.73%&nbsp;(fy22)
*4.39%&nbsp;(fy23 est.) 4.5%&nbsp;(fy24 forecast)}}
| per capita = {{plainlist|
*{{decrease}} $3,144 (nominal, 2022)
*{{increase}} $13,077 (PPP, 2022)}}
| per capita rank = {{plainlist|
*[[List of countries by GDP (nominal) per capita|156th (nominal, 2022)]]
*[[List of countries by GDP (PPP) per capita|106th (PPP, 2022)]]}}
| sectors = {{plainlist|
*[[Primary sector of the economy|agriculture]]: 16.2%
*[[Secondary sector of the economy|industry]]: 41.8%
*[[Tertiary sector of the economy|services]]: 42%
*(2017 est.)<ref name="CIAWFBT">{{cite web|url=https://www.cia.gov/the-world-factbook/countries/bhutan/ |title=The World Factbook |publisher=[[Central Intelligence Agency]]  |access-date=25 January 2019}}</ref>}}
| inflation = 7.35% (2021)<ref name="imfbh">{{cite web |url=https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/weorept.aspx?pr.x=45&pr.y=18&sy=2017&ey=2021&scsm=1&ssd=1&sort=country&ds=.&br=1&c=514&s=NGDPD%2CPPPGDP%2CNGDPDPC%2CPPPPC%2CPCPIPCH&grp=0&a= |title=World Economic Outlook Database, October 2019 |publisher=[[International Monetary Fund]] |access-date=20 October 2019}}</ref>
| poverty = {{plainlist|
*8.2% (2017)<ref>{{cite web |title=Poverty headcount ratio at national poverty lines (% of population) – Bhutan |url=https://data.worldbank.org/indicator/SI.POV.NAHC?locations=BT |publisher=World Bank |access-date=21 March 2020}}</ref>
*{{decreasePositive}} 9.8% on less than $3.20/day (2020f)<ref name="WBSpring2020">{{cite book |url=https://openknowledge.worldbank.org/handle/10986/33478 |title=South Asia Economic Focus, Spring 2020 : The Cursed Blessing of Public Banks |page=92 |publisher=[[World Bank]] |date=12 April 2020 |isbn=978-1-4648-1566-9 |access-date=14 April 2020}}</ref>}}
| gini = 37.4 {{color|darkorange|medium}} (2017, [[World Bank]])<ref>{{cite web|url=https://data.worldbank.org/indicator/SI.POV.GINI?locations=BT |title=GINI index (World Bank estimate) |publisher=[[World Bank]] |access-date=25 January 2019}}</ref>
| hdi = {{plainlist|
*{{increase}} 0.666 {{color|darkorange|medium}} (2021)<ref>{{cite web |url=http://hdr.undp.org/en/indicators/137506 |title=Human Development Index (HDI) |publisher=[[Human Development Report|HDRO (Human Development Report Office)]] [[United Nations Development Programme]] |website=hdr.undp.org |access-date=8 September 2022 |archive-url=https://web.archive.org/web/20190814034536/http://hdr.undp.org/en/indicators/137506 |archive-date=14 August 2019 |url-status=live }}</ref> ([[List of countries by Human Development Index|129th]])
*{{increase}} 0.450 {{color|red|low}} [[List of countries by inequality-adjusted HDI|IHDI]] (2018)<ref>{{cite web |title=Inequality-adjusted HDI (IHDI) |url=http://hdr.undp.org/en/indicators/138806 |website=hdr.undp.org |publisher=[[United Nations Development Programme|UNDP]] |access-date=22 May 2020}}</ref>}}
| cpi = {{steady}} 68 out of 100 points (2023, [[Corruption Perceptions Index|26th rank]])
| labour = {{plainlist|
*{{increase}} 381,742 (2019)<ref>{{cite web |title=Labour force, total – Bhutan |url=https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=BT |publisher=World Bank |access-date=5 March 2020}}</ref>
*major shortage of skilled labour<ref name="CIAWFBT"/>
*{{increase}} 61.6% employment rate (2015)<ref>{{cite web |title=Employment to population ratio, 15+, total (%) (national estimate) – Bhutan |url=https://data.worldbank.org/indicator/SL.EMP.TOTL.SP.NE.ZS?locations=BT |publisher=World Bank |access-date=5 March 2020}}</ref>}}
| occupations = {{plainlist|
*[[Primary sector of the economy|agriculture]]: 58%
*[[Secondary sector of the economy|industry]]: 20%
*[[Tertiary sector of the economy|services]]: 22%
*(2015 est.)<ref name="CIAWFBT"/>}}
| unemployment = {{steady}} 3.2% (2017 est.)<ref name="CIAWFBT"/>
| industries = Cement, wood products, processed fruits, alcoholic beverages, calcium carbide, tourism
| edbr = {{decrease}} [[Ease of doing business index#Ranking|89th (easy, 2020)]]<ref name="World Bank and International Financial Corporation">{{cite web |url=http://www.doingbusiness.org/data/exploreeconomies/bhutan |title=Ease of Doing Business in Bhutan |publisher=Doingbusiness.org |access-date=2017-11-29 }}</ref>
| exports = {{increase}} $345 million (2021)<ref name="OEC"/>
| export-goods = Iron and Steel, Salt Sulphur and Cement, Aircraft
| export-partners = {{plainlist|
*{{flag|India}} 93.3%
*{{flag|Nepal}} 3.01%
*{{flag|Italy}} 1.79%
*{{flag|South Korea}} 0.42%
*{{flag|Germany}} 0.38%
*(2021)<ref name="OEC">{{cite web|url=https://oec.world/en/profile/country/btn?yearlyTradeFlowSelector=flow0&depthSelector1=HS2Depth | title=Bhutan (BTN) Exports, Imports, and Trade Partners }}</ref>}}
| imports = {{increaseNegative}} $1.12 billion (2021)<ref name="OEC"/>
| import-goods = machinery, minerals, motor vehicles, metals
| import-partners = {{plainlist|
*{{flag|India}} 77.3%
*{{flag|China}} 9.6%
*{{flag|Thailand}} 5.38%
*{{flag|UAE}} 1.08%
*{{flag|South Korea}} 0.98%
*(2021)<ref name="OEC"/> }}
| current account = {{increase}} −$547 million (2017 est.)<ref name="CIAWFBT"/>
| gross external debt = {{increaseNegative}} $2.671 billion (31 December 2017 est.)<ref name="CIAWFBT"/>
| FDI = {{plainlist|
*{{decrease}} $160.4 million (31 December 2017 est.)<ref name="CIAWFBT"/>
*{{steady}} Abroad: n/a}}
| debt = {{decreasePositive}} 106.3% of GDP (2017 est.)<ref name="CIAWFBT"/>
| revenue = 655.3 million (2017 est.)<ref name="CIAWFBT"/>
| expenses = 737.4 million (2017 est.)<ref name="CIAWFBT"/>{{refn|group=note|the Government of India finances nearly one-quarter of Bhutan's budget expenditures}}
| balance = −3.4% (of GDP) (2017 est.)<ref name="CIAWFBT"/>
| aid = $985&nbsp;million (India) (2015-16)
| reserves = {{decrease}} $970 million (August 2022)
| cianame = bhutan
| spelling = US
}}
The '''economy of Bhutan''' is based on [[agriculture]] and [[forestry]], which provide the main livelihood for more than 60% 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. [[Bhutan]] is among the richest by [[List of countries by GDP (nominal) per capita|gross domestic product (nominal) per capita]] in South Asia, at $3,491 as of 2022, but it still places 153rd, and among the poorest in the world. The total [[List of countries by GDP (nominal)|gross domestic product]] is only $2,653 million, and 178th according to [[International Monetary Fund|IMF]].
Bhutan's economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. Most production in the industrial sector is of the cottage industry type. Most development projects, such as road construction, rely on Indian [[migrant labour]]. Model education, social, and environment programs are underway with support from multilateral development organisations.
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 such as industrial licensing, trade, labour, and finance continue to hamper foreign investment. [[Hydropower]] exports to India have boosted Bhutan's overall growth, even though GDP fell in 2008 as a result of a slowdown in India, its predominant export market.
Since 1961, the government of Bhutan has guided the economy through [[Five-Year Plans of Bhutan|five-year plans]] in order to promote economic development.<ref>{{cite web |url=http://www.bhutan2008.bt/en/node/219 |title=1961 – First Five-Year Plan launched |publisher=Bhutan 2008 |access-date=22 August 2011 |archive-url=https://web.archive.org/web/20110825224229/http://www.bhutan2008.bt/en/node/219 |archive-date=25 August 2011 |url-status=dead }}</ref>
On 8 December 2023, Bhutan graduated from the [[United Nations|UN's]] list of least developed countries (LDCs), making it only the 7th country to do so and the first in 3 years.<ref>{{cite web | url=https://unctad.org/topic/least-developed-countries/list | title=UN list of least developed countries &#124; UNCTAD }}</ref><ref>{{cite web | url=https://indianexpress.com/article/explained/explained-global/bhutan-graduated-least-developed-country-status-explained-8492253/ | title=How Bhutan graduated from the 'Least Developed Country' status | date=12 March 2023 }}</ref>
==Macro-economic trend==
{{further|Energy in Bhutan}}
This is a chart of trend of gross domestic product of Bhutan at market prices [http://www.imf.org/external/pubs/ft/weo/2007/01/data/weorept.aspx?sy=1980&ey=2008&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=37&pr1.y=8&c=514&s=NGDP_R%2CNGDP_RPCH%2CNGDP%2CNGDPD%2CNGDP_D%2CNGDPRPC%2CNGDPPC%2CNGDPDPC%2CPPPWGT%2CPPPPC%2CPPPSH%2CPPPEX%2CPCPI%2CPCPIPCH%2CLP%2CBCA%2CBCA_NGDPD&grp=0&a=|reported] by the [[International Monetary Fund]]:
{{static row numbers}}
{| class="wikitable sortable static-row-numbers static-row-header-text"
|-
! Year || GDP (millions of [[Bhutanese ngultrum|BTN]]) || GDP (millions of USD)
|-
| 1985 || 2,166|| 175
|-
| 1990 || 4,877 || 279
|-
| 1995 || 9,531 || 294
|-
| 2000 || 20,060 || 460
|-
| 2005 || 36,915 || 828
|-
| 2008 || 45,000 || 1280
|-
| 2011 || 84,950 || 1695
|-
| 2014 || 119,546||1784
|-
| 2017 || 159,572||2294
|-
|}
Bhutan's [[hydropower]] potential and its attraction for tourists are key resources. The [[Bhutanese government|Bhutanese Government]] has made some progress in expanding the nation's productive base and improving social welfare.
In 2010, Bhutan became the first country in the world to [[smoking ban|ban smoking]] and the selling of tobacco. In order to stamp out cross-border smuggling during the pandemic, a new Tobacco Control Rules and Regulations (TCRR) 2021 allowed the import, sales and consumption of tobacco products.<ref>{{cite web |title = Selling and buying of tobacco products are no longer illegal in Bhutan |url = https://www.dailybhutan.com/article/selling-and-buying-of-tobacco-products-are-no-longer-illegal-in-bhutan |publisher = DailyBhutan |access-date = 6 December 2021}}</ref>
== Membership of economic organizations and agreements ==
In terms of trade, Bhutan is a member of the [[South Asian Free Trade Area]] (SAFTA) and the [[Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation]] (BIMSTEC) and the [[South Asia Subregional Economic Cooperation]] (SASEC).<ref name=":27">{{Cite journal |last=Penjore |first=D |date=2004 |title=Security of Bhutan: walking between the giants |url=https://core.ac.uk/download/pdf/1323138.pdf |journal=Journal of Bhutan Studies |volume=10 |pages=108–131 |via=Cambridge University Press}}</ref><ref>{{Cite web |title=Bhutan {{!}} International Investment Agreements Navigator {{!}} UNCTAD Investment Policy Hub |url=https://investmentpolicy.unctad.org/international-investment-agreements/countries/23/bhutan |access-date=2024-05-01 |website=investmentpolicy.unctad.org}}</ref><ref>{{Cite web |title=South Asian Free Trade Area (SAFTA) {{!}} LDC Portal – International Support Measures for Least Developed Countries |url=https://www.un.org/ldcportal/content/south-asian-free-trade-area-safta |access-date=2024-04-29 |publisher=United Nations}}</ref> Bhutan is also a member of the pan-Asian [[Asia Cooperation Dialogue]] (ACD), and the [[Asian Development Bank]].<ref>{{Cite web |title=Asia Cooperation Dialogue |url=http://www.acd-dialogue.org/membership-bhutan.html |access-date=2024-04-29 |website=acd-dialogue.org}}</ref><ref>{{Cite web |last=Asian Development Bank |date=12 July 2023 |title=Bhutan and ADB |url=https://www.adb.org/where-we-work/bhutan |access-date=1 May 2024 |publisher=Asian Development Bank}}</ref>
Bhutan first applied to join the WTO in 1999 and as an applicant, was quickly granted observer status<ref name=":0">{{Cite web |title=Bhutan’s Long Journey into the World Trade Organization |url=https://thediplomat.com/2024/01/bhutans-long-journey-into-the-world-trade-organization/ |access-date=2024-05-01 |website=thediplomat.com}}</ref> Beyond that, ascension proceedings at the WTO have been much delayed and periodically put on pause, largely stemming from concerns and considerations of the Bhutanese government itself.<ref name=":0" /><ref>{{Cite web |title=Govt says no to WTO for now |url=https://thebhutanese.bt/govt-says-no-to-wto-for-now/ |access-date=2024-05-02 |website=The Bhutanese}}</ref><ref name=":1">{{Cite journal |last=Wangchuk |first=Karma Tshering |date=2021-03-09 |title=Bhutan and India’s Free Trade Agreement (FTA) and the World Trade Organization (WTO): A Critical Appraisal |url=https://journal.rtc.bt/index.php/rigtshoel/article/view/61 |journal=Rig Tshoel – Research Journal of the Royal Thimphu College|volume=4 |issue=1}}</ref><ref>{{Cite journal |last=Mancall |first=Mark |title=Bhutan’s Quadrilemma: To Join Or Not To Join The WTO, That Is The Question |url=https://himalaya.socanth.cam.ac.uk/collections/journals/jbs/pdf/JBS_09_05.pdf |journal=Journal of Bhutan Studies |publication-date=2003 |volume=9 |issue=5 |via=Digital Himalaya}}</ref> The Bhutanese government approved ascension to the WTO in April 2023, at least partly hastened by the country's upcoming graduation from the UN-defined '[[Least developed countries|least developed country]] (LDC) category.<ref name=":2">{{Cite web |title=Opinions vary as Bhutan’s graduation from LDC Status amid joining WTO |url=https://thebhutanese.bt/opinions-vary-as-bhutans-graduation-from-ldc-status-amid-joining-wto/ |access-date=2024-05-01 |website=The Bhutanese}}</ref><ref>{{Cite web |date=13 December 2018 |title=Graduation of countries from the least developed country category; Resolution adopted by the General Assembly on 13 December 2018. |url=https://documents.un.org/doc/undoc/gen/n18/439/93/pdf/n1843993.pdf?token=YZdyzNKt08pWDMKXEr&fe=true |access-date=1 May 2024 |publisher=United Nations}}</ref> Under WTO rules and processes, ascent of a country with LDC status comes with some leniency in certain requirements, more relaxed timeframes for compliance, and additional support;<ref>{{Cite web |title=World Trade Organization (WTO ) {{!}} LDC Portal – International Support Measures for Least Developed Countries |url=https://www.un.org/ldcportal/content/wto#:~:text=WTO%20members%20offer%20LDCs%20greater,also%20benefit%20from%20institutional%20support. |access-date=2024-05-02 |publisher=United Nations}}</ref> so, whilst the loss of LDC status, as happened in December 2023, was a reflection of Bhutan's success and development progress, it also meant much further delay in WTO ascension (that is, ascent after the loss of LDC status) would make the journey through to full WTO member status even harder.<ref name=":1" /><ref name=":2" /><ref>{{Cite web |title=Bhutan graduates from LDC status {{!}} Department of Economic and Social Affairs |url=https://www.un.org/development/desa/dpad/2023/bhutan-graduates-from-ldc-status/ |access-date=2024-05-01 |publisher=United Nations}}</ref>
== GNH versus GDP ==
In the 1970s the King placed [[Gross National Happiness]] over Gross Domestic Product.<ref>{{Cite web |last=Sharma |first=Lyonpo Loknath |date=25 October 2021 |title=What Bhutan got right about happiness – and what other countries can learn |url=https://www.weforum.org/agenda/2021/10/lessons-from-bhutan-economic-development/ |access-date=2022-02-27 |website=World Economic Forum}}</ref><ref>{{Cite web |title=Bhutan's Gross National Happiness Index |url=https://ophi.org.uk/policy/gross-national-happiness-index/ |access-date=2022-02-27 |website=Oxford Poverty & Human Development Initiative (OPHI) |publisher=University of Oxford}}</ref>
== See also ==
* [[Agriculture in Bhutan]]
* [[Banking in Bhutan]]
* [[Mining in Bhutan]]
* [[Fishing in Bhutan]]
* [[Forestry in Bhutan]]
* [[Bhutanese ngultrum]], currency
==References==
;Notes
{{reflist|group=note}}
;Public domain
*{{CIA World Factbook}}
*{{StateDept}}
;Citations
{{Reflist}}
== Further reading ==
*{{Cite web|date=October 2011|title=The Economic Contribution of Copyright-Based Industries in Bhutan|url=https://www.wipo.int/export/sites/www/copyright/en/performance/pdf/econ_contribution_cr_bt.pdf |archive-url=https://web.archive.org/web/20130604113119/http://www.wipo.int/export/sites/www/copyright/en/performance/pdf/econ_contribution_cr_bt.pdf |archive-date=2013-06-04 |url-status=live|publisher=Intellectual Property Division, Ministry of Economic Affairs. Royal Government of Bhutan.}}
*{{Cite web|date=December 2016|title=Economic Development Policy|url=https://www.moea.gov.bt/wp-content/uploads/2017/07/Economic-Development-Policy-2016.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.moea.gov.bt/wp-content/uploads/2017/07/Economic-Development-Policy-2016.pdf |archive-date=2022-10-09 |url-status=live|publisher=Royal Government of Bhutan}}
*{{Cite journal|last=Shah|first=Sukhdev|date=1989|title=Developing Bhutan's Economy: Limited Options, Sensible Choices|url=https://www.jstor.org/stable/2644628|journal=Asian Survey|volume=29|issue=8|pages=816–831|doi=10.2307/2644628|jstor=2644628 |issn=0004-4687}}
*{{Cite web|last=Nayak|first=Sohini|date=7 February 2022|title=The Bhutanese economic revival|url=https://www.orfonline.org/expert-speak/the-bhutanese-economic-revival/|website=ORF}}
*{{Cite web|last=Ranjan|first=Amit|date=17 February 2020|title=Structural Transformation of Bhutan's Economy: Challenges Remain|url=https://www.isas.nus.edu.sg/papers/structural-transformation-of-bhutans-economy-challenges-remain/|publisher=National University of Singapore (NUS) Institute of South Asian Studies (ISAS)}}
==External links==
*[http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/0,,contentMDK:21160796~pagePK:146736~piPK:146830~theSitePK:223547,00.html Global Economic Prospects: Growth Prospects for South Asia] [[The World Bank]], 13 December 2006
{{Bhutan topics}}
{{Asia in topic|Economy of}}
{{SAFTA}}
{{DEFAULTSORT:Economy of Bhutan}}
[[Category:Economy of Bhutan| ]]