… power export from Mangdechhu hydropower plant curbed trade deficit
Despite the Covid-19 pandemic, the country’s overall exports including electricity increased to more than Nu 48 billion (B) in 2020 from Nu 47B in the previous year, according to the trade statistics 2020.
The increase in exports combined with the decline in imports contributed to the decrease in the trade deficit, which signifies the gap between the value of exports and imports.
Imports in 2020 decreased to Nu 66.4B from Nu 69B in the previous year. The overall trade deficit decreased to Nu 18.38 billion from Nu 21.6B.
In an ideal situation, the trade deficit narrows when exports grow faster than imports. A decrease in the import of raw materials and readymade goods affect the production level of industries and consumption, according to economists.
Although the overall exports increased, non-electricity exports decreased by 33 percent to Nu 20.7B in 2020 from Nu 31.2B in the previous year.
This indicates that the increase in the overall exports and the decrease in trade deficit were mainly on account of the commissioning of the Mangdechhu hydroelectric plant (MHEP) in June 2019.
Although the overall balance of trade decreased, the balance of trade excluding electricity increased to Nu 45.7B in 2020 from Nu 37.6B in the previous year.
Last year, Bhutan exported electricity worth more than Nu 27.5B to India. The value of electricity exported from the Mangdechhu project amounted to almost Nu 13.1B, which was the highest among the five projects.
The country also imported electricity worth more than Nu 180 million (M) last year.
Country-wise, exports to India which was the largest trading partner accounted for 33 percent worth Nu 15.989B. Electricity, cement, cardamom and minerals are some of Bhutan’s major exports to India.
The country’s top exports included silicon, boulders, cement, gypsum and anhydrite. Among the top imports were rice, coke, telephones for cellular networks or wireless networks and motor spirit (gasoline) including aviation spirit (petrol).
Bhutan exported goods worth Nu 3.955B to Bangladesh which is the second-largest trading partner in terms of exports. Some of the main exports to Bangladesh included oranges, mineral waters, granite, porphyry, basalt, building stone and boulders.
Nepal was the third-largest export destination where goods worth Nu 169M was exported. Minerals, dried vegetables and mushrooms are some of the goods exported to Nepal.
About 76 percent of goods including fuel, food items and pharmaceutical items worth more than Nu 51B were imported from India.
Imports from France and China amounted to Nu 6.27B and Nu 2B respectively and were the second and third largest trading partners in terms of imports.