Bhutan’s trade deficit last year was at Nu 29.7B, down from Nu 32B in the previous two years, according to Bhutan Trade statistics.
The country in 2017 exported goods worth Nu 37.3B and imported Nu 67B worth of goods, meaning that the country’s import value exceeded the value of its exports.
When a country’s import value is greater than its export, the country is experiencing trade deficit.
Electricity export played a crucial role in narrowing the trade deficit. Had it not been for electricity export, the country’s trade deficit could hover around Nu 41B in the red.
Excluding electricity export, Bhutan’s export value stands at Nu 25.3B against Nu 67B worth of imports.
Trade deficit is the largest component of the current account deficit as it includes both trade balance and balance of payments, which is the sum of all transactions between a nation and all of its international trading partners.
Current account deficit has led to rupee shortage in the economy in the past. This problem could lead to economic instability and adversely affect the growth.
Bhutan’s trade balance with India is Nu 22.35B in the red, as the export value including Nu 12B electricity export amounts to Nu 31.6B, while Bhutan has imported Nu 53.9B worth of goods from India. This figure also dropped from Nu 23.2B in 2016.
Energy trade is also in quandary with the 5.37 million units of export earning about Nu 12B in 2017. In exchange for the supposed clean energy, the country imported Nu 6.6B worth of diesel and around Nu 2B worth of petrol. Deducting the loan repayment of hydropower projects, the energy trade balance is almost nullified.
Apart from the diesel and petrol, rice is one of the top ten import commodities, amounting to about Nu 1.7B expenditure.
Despite the country’s emphasis on agriculture and livestock, the country imported more than Nu 6.6B worth of products derived from animals and vegetables.
As per the Bhutan Trade Classification, under the HS code of live animals and animal products, which includes meat, fish and dairy produce, Bhutan imported goods worth of Nu 2.8B.
Under the HS code of vegetable products, which also include nuts, coffee, tea and cereals among others, the value of import stands at Nu 3.8B.
The country has also imported vehicles and accessories worth Nu 5.2B, of which Nu 4.3B was from India.
Bhutan’s top export, as usual, is silicon products valued at Nu 9.66B, followed by other mineral based products. Cement export is valued at Nu 1.25B.
Country-wise, India, South Korea, Japan, China, and Thailand were the top five import destinations in 2017.
With regard to export, besides India, Bangladesh, Italy, the Netherlands, and Nepal were the top export destination.