Along The Tracks of the Economy -2023

It has not been a very good year for the Bhutanese economy, with inflation and unemployment rates surging, the trade deficit expanding and reserves depleting. In the face of these challenges, 2023 witnessed the Central Bank and the government undertake several measures to provide temporary respites, such as the adoption of moratoriums on the import of selected goods and a sunset clause to temporarily reduce the sustainable development fund (SDF) for dollar paying tourists.

Additionally, revenue generated from the export of electricity saw a decline in 2023. The year saw the formulation of an ambitious 13th Plan, geared towards resolving most of the economic problems.

Foreign Reserves

As of October 2023, Bhutan’s foreign reserve stood at USD 464.66 million (mn), an astounding slump from the figures in the same period last year. According to the monthly statistical bulletin released by the Royal Monetary Authority (RMA) of Bhutan, foreign reserves have been decreasing from the month of June to October 2023. In the month of June this year, the foreign reserve stood at USD 532.23mn. However, in July and August, the foreign reserve had decreased and stood at USD 472.40mn and USD 468.41mn respectively.

Export and import

The country generated about Nu 8 billion (bn) in revenue during the third quarter of 2023, from the export of the top ten commodities. However, this is a decrease of about Nu 1bn as compared to the second quarter of 2023.

According to figures from the Department of Revenue and custom (DRC), the top ten commodities include silicon, dolomite, ferro-silico-manganese, boulders, pebbles, and gravels, gypsum and anhydrite, dolomite ordinary Portland cement, amongst others.

However, the amount that Bhutan spent to import the top ten commodities is about Nu 26bn as of the third quarter of 2023, a decrease of about Nu 1bn as compared to the import of top ten commodities in the second quarter of 2023.


Hydropower revenue saw a dip of about Nu 996.47mn in October 2023, as compared to the same month in 2022. According to reports, the domestic revenue from these projects plummeted by 40.78%, with revenue generated through export in the same period decreasing from Nu 3,439.77mn last year to Nu 2443.3mn this year.

Meanwhile, the Project Preparedness Financing Agreement was signed between the Ministry of Finance (MoF), Asian Development Bank (ADB), and Druk Green Power Corporation (DGPC) on December 18, 2023, for a concessional loan of USD 5mn to update the DPRs for the 404 MW Nyera Amari I and II and 180 MW Bunakha projects.

The corporation is also working on the DPR for the 1125MW Dorjilung hydropower project in Dorjilung, Mongar, amongst others.


Inflation has increased by 4.60% as of November 2023 compared to the same month last year. The price has increased for both food and non-food, by 5.21% and 4.09% respectively. From the twelve major divisions, except for transport and communication, the prices for all other divisions increased.

Similarly, the prices for transport and communication decreased by 0.99% and 2.86% respectively while the prices of food and non-alcoholic beverages increased by 5.16% and prices for alcoholic beverages and betel nuts increased by 5.81%. Similarly, the price of housing and utilities has also increased by 9.51%, this is according to the data released by NSB in December 2023.

Inflation in November 2023 has increased by 0.21% from October of the same year.

Loan moratorium

In the face of depleting reserves and increased imports, the central bank took another significant step. In a letter dated June 8, 2023, the RMA issued a directive to all chief executive officers (CEOs) of financial institutions, announcing a moratorium on commercial housing and hotel construction loans.

As per the letter, the decision was motivated by broader concerns expressed by the RMA and the Royal Government of Bhutan (RGoB) regarding the outflow of foreign currency and the high concentration of credit and non-performing loan risks in these sectors.


A total of 9,237 tourists arrived in the country in the month of November this year, accounting for those guests who came in only on a tourist visa excluding all other categories. ‘This represents a 10.58% increase over forecasted figures.

On September 23, 2023, Bhutan reopened its international borders. Though there has been tourists who have visited Bhutan since then, the numbers are very low.  Only 77,063 tourists visited the country between September 23, 2022, and August 13, 2023.

Meanwhile, the SDF for dollar-paying tourist have been reduced with a discount of 50% for every dollar-paying tourist visiting from the month of October 2023.

The changes include three major incentives, that is, a discount of 50% for every adult US dollar paying tourist, meaning, a person shall only pay USD 100 per day.

Likewise, the other change includes 50% discount to US dollar-paying children between 6 to 12 years old and the 24-hour Sustainable Development Fee (SDF) waiver for tourists staying in border towns to be continued. The incentive will remain effective till August 31st, 2027.

Employment and Unemployment

The country’s overall employment rate stands at 96.5% with variations between rural employment at 98.1% and urban at 93.8% areas as of 2023.

Similarly, the unemployment rate for 2023 is 3.5%, with the urban unemployment rate at 6.2% and rural unemployment rate at 1.9% percent.

The unemployment rate for the youth stand at 15.9% with differences between males consisting of 13.4% and females consisting of 18.3%.

13th Five-Year Plan

The draft “Planning Guidelines for the formulation of Long Term Perspective Plan (2024-2034) and 13th Five Year Plan (Feb 2024- Feb 2029) for Economic Cluster,” aspire to increase GDP from USD 2.5 bn to USD 5bn by 2029, and USD 10bn by 2034.

The government also plans to increase GDP per capita from USD 3400 to USD 4,256 by 2029, and above USD 12000 by 2034 and also to create full employment (97.5%) with quality jobs by 2027 and income of the bottom 40% to quadrupled by 2030 and by 2030 reverses the Total Fertility Rate (TFR) from 1.9 to 2.1.

Sherab Dorji from Thimphu