Thukten Zangpo

Despite the country’s import figures dropping 6.8 percent in the first nine months this year compared to the same period last year, the trade deficit has grown by 6 percent.

In absolute figures, the import bill was recorded at Nu 86.7 billion as of September against Nu 93.03 billion, a decrease of Nu 6.34 billion, according to the finance ministry.

The widening trade deficit was mainly because of a fall in Bhutan’s major export, electricity sales which dropped by 21 percent this year compared to the same period last year.

As of September this year, Bhutan’s trade deficit was recorded at Nu 48.13 billion against Nu 45.22 billion in the same period last year.

Electricity generation decreased to 3,497.21 million units from 5,984.63 million units and electricity export value declined to Nu 14.48 billion in the first nine months this year compared to Nu 18.4 billion in the same period last year.

This was mainly because of the adverse weather conditions, particularly erratic monsoon rains that led to a shortfall in hydropower production.

This has led to a decrease in the country’s export bill to Nu 41.48 billion from Nu 44.9 billion in the same period.

Bhutan imported Nu 1.88 billion worth of electricity from India during this period.

The decline in import figures can also be attributed to the government’s import moratorium on non-essential vehicles since August last year and suspension of housing loans including home and hotel construction from June 9 until December 31 this year.

Bhutan’s top import fuel accounted for Nu 10.67 billion as of September this year.

At the same time, the country imported rice worth Nu 2.35 billion and Nu 1.77 billion worth of smartphones as of September this year against Nu 1.92 billion and Nu 1.45 billion respectively in the same period last year.

Bhutan, on the other hand, exported Nu 12.93 billion worth of ferrosilicon, a decline from Nu 15.75 billion during the same period last year.

However, boulder exports increased to Nu 1.61 billion as of September this year from Nu 1.13 billion last year in the same period.

Despite the country’s declining import bill, the foreign currency reserves was reported at USD 467 million, enough for 12.08 months of essential imports or USD 3 million more to hit the constitutional threshold of USD 464 million.

According to the Constitution, a minimum foreign currency reserve that is adequate to meet the cost of not less than one year’s essential import must be maintained.