Nu 14.44B trade deficit in the first quarter this year

Nu 14.44B trade deficit in the first quarter this year

Experts suggest diversification of export values and identification of multiple trading partners

According to the department of revenue and customs (DRC), the country has imported commodities worth Nu 23.84 billion (B) from the top ten import countries. Similarly the country exported goods worth Nu 9.40B to the top ten export countries.

The department saw a trade deficit of about Nu 14.44B. The trade deficit is mainly attributed to the import worth Nu 20.80B from India, followed by 1.8B worth of commodities from China and about Nu 289.93 million (M) and Nu 212.69M worth of commodities from Thailand and Singapore respectively.

Similarly, during the first quarter of this year, the country exported commodities worth of only about  Nu 7.18B to India, followed by about Nu 1.7B to Bangladesh, Nu 201M and Nu 125M to Republic of Korea and Nepal respectively.

Meanwhile, the top ten import commodity includes oil, motor spirit, semi-milled or wholly- milled rice, Smartphone, coke and semi-coke, photovoltaic cells not assembled in modules or made up into panels, amongst others.

The top ten export commodities includes silicon, boulders, dolomite, pebbles, ordinary Portland cement, oranges, gypsum, portland pozzalana cement, amongst others and the top ten import country includes India, China, Thailand, Singapore, Bangladesh, and United State of America, Austria, Nepal, Germany and Switzerland.

Amongst the top ten import countries, the country imported the least from Switzerland with commodities worth of about Nu 94M, followed by Germany with Nu 105M.

Similarly, the country also generated revenue  worth Nu 9B through the six regional check posts, namely, Gelephu Regional Revenue and Customs Office (RRCO), Paro RRCO, Phuentsholing RRCO, Samdrup Jongkhar RRCO, Samtse RRCO and Thimphu RRCO.

The Phuentsholing RRCO generated the highest revenue worth Nu 4.97B, followed by Samtse RRCO with Nu 2.03B. Nu 1.65B and Nu 771M revenue fwere generated from Samdrup Jongkhar RRCO and Gelephu RRCO respectively.

An official from the Asian Development Bank (ADB) based in the capital said, “Bhutan has a diverse set of trading partners, including neighboring countries like India and China, as well as countries from other regions like Thailand, Singapore, and the United States. This diversification can help mitigate risks associated with over-reliance on a single trading partner.”

The economist added that with Bhutan’s diverse variety of export commodities, it has the potential for growth and expansion that will help to reduce trade deficit and boost economic growth up to some extent.

However, the expert said that with Bhutan’s low value of export  as compared to import, the country may not be fully capitalizing the export potential as there is limited export diversity as compared to import diversity.

For instance, on the trade deficit front, the expert said that the imbalanced deficit, can lead to strain on the country’s foreign exchange reserves and may lead to dependence on external financing.

Meanwhile, despite diverse trading partners and export commodities, limited export diversity remains a challenge. To this, the economists suggested leveraging diversity for growth and reducing dependency on singular partners though the regional revenue from checkpoints like Phuentsholing RRCO indicates potential revenue generation.

By Sherab Dorji, Thimphu