China is the second-largest import market after India
Bhutan’s trade deficit declined by 32 percent in the first half of 2020 compared to figures for the same period of last year, provisional statistics published by the finance ministry show.
In absolute figures, the trade deficit decreased to Nu 12.84 billion (B) from Nu 19B.
The improvement in trade deficit is partly due to a decrease in imports, according to the statistics. The international border with India remains closed since March 23 and imports have largely been restricted since.
Imports decreased to Nu 30.84B in the first half of this year from Nu 32B for the same period of last year.
Officials say that a decrease in imports does not necessarily mean good for the overall health of the economy. A decline in imports normally leads to not only a decreased consumption, but also a decline in the export of manufactured goods.
Economic Affairs Minister Loknath Sharma, however, said that the import decline was a good indicator when it came to balance of trade. “But the manufacturing capacities of our factories would be reduced and the overall business would be down,” he added.
Exports on the other hand increased to Nu 18B in the first half of this year from Nu13B for the same period last year.
The increase was driven mainly by the increase in the export of electricity to India due to the commissioning of the Mangdechhu hydroelectric project in June last year. The project started to generate revenue in the second half of last year.
The project generated Nu 6.807B worth of electricity in the first half of the year, according to figures with Druk Green Power Corporation.
Among the top imports, petroleum products such as diesel and petrol dominate in terms of value.
Until June this year, the country imported about Nu 2.876B worth of light oils and preparations, which is the highest among imports in terms of monetary value. The country also imported Nu 1.569B worth of rice.
In terms of exports, ferro-silicon emerged as the top export commodity with more than Nu 2.913B in value. Export of boulders amounted to Nu 899.9M.
Country-wise, goods worth Nu 26.96B were imported from India. This is 87 percent of the total imports.
Bhutan imported goods worth more than Nu 1B from China. This makes China the second largest import market after India.
The country imported goods worth Nu 132.76M from Bangladesh, which is one of the closest trading partners.
Countries that Bhutan imported most of the goods from include Singapore, Germany, Thailand, Japan, the United Kingdom, the United Arab Emirates, Malaysia, Hong Kong, Denmark, Vietnam, the Netherlands, South Africa and the United States of America.
In terms of exports, Bhutan exported goods worth Nu 7.191B to India making it the biggest market in terms of both exports and imports.
Bangladesh was the second largest market for Bhutanese goods. The country exported goods worth Nu 1.744B to Bangladesh in the first half of this year.
Top export destinations included Vietnam, Italy, Nepal, Turkey, the United Kingdom, the United States of America, the Netherlands, Belgium, Hong Kong, Thailand and Taiwan.