…dropped by 8.7 percent last year

Thukten Zangpo

Bhutan’s import bill last year saw a drop in the value for the first time since Covid-19 pandemic by 8.7 percent or Nu 10.37 billion compared to the previous year.

The import bill was reported at Nu 108.42 billion last year, according to the figures with the Department of Revenue and Customs under the finance ministry.

The country’s import has been on rise since Covid-19 pandemic, recording Nu 66.64 billion in 2020 to Nu 90.3 billion in 2021, and Nu 118.79 billion in 2022.

At the same time, the country’s exports to India (80 percent) and other countries fell by 7 percent, reported at Nu 52.92 billion worth of goods last year compared to Nu 56.87 billion in the previous year.

Both declining import and export bills narrowed the country’s balance of trade. Trade deficit, where the value of imports exceeds the value of exports, declined to Nu 55.5 billion last year compared to 2022, a decrease by Nu 6.42 billion.

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

This unsustainable rate of import increase, inflationary pressures, and the depreciation of the ngultrum against the USD had put pressure on the dwindling foreign currency reserves.

The widening of the trade deficit have serious implications for Bhutan’s foreign currency reserves.

According to the Royal Monetary Authority, the country’s reserve stood at USD 492.33 million as of November last year, a decrease of 33 percent from the same month of the previous year.

Electricity sale still plays an important role in narrowing the country’s trade imbalance. If not for electricity export to India, the trade deficit would have further widened to Nu 72.18 billion.

Last year, Bhutan exported Nu 16.68 billion worth of electricity, a decrease from Nu 22.48 billion in 2022.

However, the country’s top import, fuel, accounted for Nu 13.35 billion last year from Nu 11.37 billion in 2022.

At the same time, the import of smartphones rose to Nu 2.24 billion from Nu 1.93 billion during the same period. The import of rice, however, declined to Nu 2.61 billion last year from Nu 3.06 billion during the same period.

Bhutan also exported Nu 16. 52 billion worth of ferrosilicon, Nu 2.68 billion of dolomite, and Nu 2.36 billion worth of boulders last year.