However, the overall balance of trade in the year 2023 has improved compared with 2022
The balance of trade (BoT) including electricity stood at a deficit of Nu 12.7 Billion (B) in the second quarter of this year. The Bhutan Trade Statistics 2024 released by the department of revenue and customs (DRC) says that the country’s exports were worth Nu 14.79B including electricity, while imports were valued at Nu 27.5B, reflecting a negative BoT of about Nu 12.7B during the second quarter of 2024.
Similarly, the BoT without including electricity stood at a deficit of Nu 14.19B, with exports worth Nu 12.5B and imports worth Nu 26.7B.
The BoT including electricity with India stood at a deficit of Nu 14.8B with exports worth Nu 9.9B and imports worth Nu 24.7B during the second quarter this year.
The highest electricity export was traded by Mangdechhu Hydroelectric Project (MHEP) in the second quarter worth Nu 1.5B, followed by Nikachhu Hydroelectric Project (NHEP) with Nu 275M, while Nu 229M and Nu 132M was churned in by Chhukha Hydroelectric Project (CHEP) and Dagachhu Hydroelectric Project (DHEP) respectively.
Conversely, the Druk Green Power Corporation (DGPC) imported electricity worth Nu 4.3B during the second quarter of the year 2024, according to the Department of Energy (DoE).
Although the economy experienced a trade deficit of Nu 62.11B in 2023, it was an improvement compared to the year 2022. The trade deficit in nominal terms dropped by 21.13% from the deficit of Nu 78.8B recorded in the year 2022.
The trade deficit accounted for 24.91% of Gross Domestic Product (GDP) in 2023 after adjusting for inflation. The trade deficit in 2023 dropped by 29.76% compared to a trade deficit of 59.91% of the GDP in 2022.
The statistics highlighted that “the significant reduction in the trade deficit indicates an improvement in the balance of trade in 2023 as compared to 2022, driven by a combination of increased exports and reduced imports.”
Export of Goods and Services (2023 and 2022)
In 2023, the economy experienced a significant boost in the export of goods and services, with an overall increase of 30.68%, according to the DRC and also represented a rise of 39.82 percentage points compared to the year 2022. The export of goods specifically saw a modest growth of 2.42% and made up 75.83% of the total export value.
The export of services, which had faced three consecutive years of contraction, recorded an impressive rebound with a growth of 873.03% in 2023, contributing 24.17% to the total exports.
In terms of value, the total export of goods and services at current prices was estimated to be valued at Nu 70.65M in 2023. This export volume accounted for 28.33% of the GDP for the year, marking an increase of 2.83 percentage points compared to the year 2022.
Import of Goods and Services (2023 and 2022)
The total value of imports of goods and services at current prices was estimated at Nu 132.7M in 2023, a notable drop from Nu 136.8M in the year 2022. Imports in general accounted for 53.24% of GDP. From this, the total imports of goods consisted 78.62%, while services accounted for 21.38%.
The growth rate of imports of goods and services fell to -0.61% in 2023, down from the 17.01% growth observed in 2022. This represents a drop of 17.62 percentage points compared to the previous year.
In the meantime, the import of goods witnessed a decline of 7.31%. However, the import of services grew significantly by 35.38% compared to 2022.
Inflation (2023 and 2024)
The GDP deflator, also known as the implicit price deflator, measures the price change for goods and services produced within the domestic economy. The inflation, based on the Implicit Price Deflator (IPD), was recorded at 4.37% in 2023, a drop of 1.42 percentage points compared to the inflation rate of 5.79% in 2022.
“This indicates deceleration in the rate of price change from the previous year for the goods and services produced within the economy,” according to the national accounts statistics report 2024.
Meanwhile, as per the latest data released by National Statistics Bureau (NSB), the inflation of the country stood at 4.87% as of April 2024.
By Sherab Dorji, Thimphu
