…imports Nu 4.3 billion worth of electricity 

Thukten Zangpo  

The country’s trade deficit for the first quarter of this year, spanning from January to March, including electricity sale, stood at Nu 19.24 billion.

The trade deficit narrowed by 12.8 percent or Nu 2.84 billion compared to the same period last year. 

According to the trade statistics, Bhutan imported Nu 28.84 billion worth of goods, of which the balance of trade with India accounts to more than Nu 25.11 billion. This was a decline by 8.7 percent or Nu 2.75 billion during the same period. 

Last year’s import figure was recorded at Nu 31. 59 billion during the same period. 

A country experiences a trade deficit when the value of imports exceeds the value of export. 

Bhutan’s main source of export revenue, from electricity, saw a significant increase in imports impacting the country’s balance of trade in the first quarter. Bhutan usually imports electricity during the lean season from December to March.

Because of poor hydrology, the country imported Nu 4.3 billion worth of electricity in the first quarter this year, which is an increase by Nu 2.7 billion in the same period last year’s Nu 1.55 billion.

Had it not been for the electricity import, the country could have experienced a decrease in trade deficit at Nu 14.93 billion in the first quarter. 

The country exported electricity worth Nu 198.08 million from Nu 218.51 million in the same period.

In 2023, Bhutan exported electricity worth Nu 16.67 billion while import was Nu 1.88 billion. 

The decrease in the import bill was mainly because of the government’s import moratorium of non-essential vehicles from August 2022. 

At the same time, the government suspended all housing loans, including those for home and hotel construction, from June 9 last year. 

Among the top ten imports, the fuel import topped the country’s imports amounting to Nu 3.7 billion. It was an increase from Nu 3.3 billion and Nu 1.71 billion in the first quarter of last year and the previous year respectively. 

The country imported Nu 706.41 million worth of rice, which is a decrease from Nu 751.71 million last year, and Nu 677.19 million in 2022.

Moreover, import of smart phones was reported Nu 613.86 million, a decrease from Nu 635.85 million in the first quarter of last year.

The country also experienced an export figure increase by 1 percent to Nu 9.6 billion during the same period. 

Ferrosilicon, the country’s top export, witnessed a decrease to Nu 3.12 billion from Nu 3.73 billion in the same period. 

Conversely, the boulder export doubled to Nu 935.73 million from Nu 467.34 million. At the same time, orange export grew to Nu 351.7 million from Nu 291.51 million. 

This trade deficit, where the value of imports exceeds the value of exports, has serious implications for Bhutan’s foreign currency reserves. 

The unsustainable rate of import increase, inflationary pressures, and the depreciation of the ngultrum against the USD further contribute to the decline of foreign reserves.

As of November last year, the country’s external reserve stood at USD 533.29 million, a decrease of 31 percent compared to the same month of the previous year.