Economy of Bhutan

The economy of Bhutan, one of the world's smallest and least developed, 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 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.

Macro-economic trend

This is a chart of trend of gross domestic product of Bhutan at market prices by the International Monetary Fund:
Year GDP (millions of BTN) GDP (millions of USD)
1980 1,029 131
1985 2,166 175
1990 4,877 279
1995 9,531 294
2000 20,060 460
2005 36,915 828

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. 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 such areas as industrial licensing, trade, labor, and finance continue to hamper foreign investment.

In 2004, Bhutan became the first country in the world to ban smoking and the selling of tobacco.

Other statistics

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


  • production: 2 TWh (2005)
  • consumption: 380 GWh (2005)
  • exports: 1.5 TWh (2005) (exports electricity to India)
  • imports: 20 GWh (2005)

Electricity - production by source:

  • fossil fuel: 0.39%
  • hydro: 99.61%
  • nuclear: 0%
  • other: 0% (1998)


  • production: 0 barrel/day (2005)
  • consumption: 1,200 barrel/day (2005 est.)
  • exports: 0 barrel/day (2004)
  • imports: 1,138 barrel/day (2004)

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

Currency: 1 ngultrum (BTN) = 100 chetrum; Indian rupee (INR) is also legal tender

Historic exchange rates:

  2006 2005 2004 2003 2002 2001 1999 1998 1997 1996 1995
Ngultrum per US$1 45.279 44.101 45.317 46.583 48.61 47.186 43.055 41.259 36.313 35.433 32.427
Note: the ngultrum is pegged to the Indian rupee


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