Figures, however, show that the country’s trade balance began deteriorating from 2013
The country’s trade deficit in the second quarter between April to June this year, including trade in electricity, is estimated at around Nu 21.2bn, of which the balance of trade with India alone accounts for more than Nu 12bn in the red.
The country experienced a trade deficit of Nu 13bn in the first quarter of the year and trade with India accounts for Nu 9.2bn of the total trade deficit. This takes the country’s total trade deficit to almost Nu 21.2bn within the first six months of 2022.
A country experiences a trade deficit or negative trade balance if its import bill is more than its earnings from export.
According to the provisional trade statistics for the second quarter of this year, Bhutan imported commodities worth more than Nu 35.8bn, which is an increase from Nu 13bn in the first quarter.
The country’s export value (including electricity) also experienced an increase from around Nu 9.7bn in the first quarter to Nu 13.6bn in the second quarter.
Import, however, hovered around more than Nu 13.2bn in both quarters, meaning that the country imported goods worth more than Nu 35.8bn until June this year.
The deficit is narrowed due to electricity export. Had it not been for the electricity export, the country could have experienced a trade deficit of another Nu 27.2bn in the second quarter alone.
Although the exact import and export figures will be released at the end of the year, electricity generation during the second quarter of the year was recorded at Nu 6bn. In the first quarter, which is usually a low generation season (January-March), earning from electricity was only Nu 721mn.
The country also imported fuel worth more than Nu 1.9bn in the first quarter, putting diesel and petrol as the two top most imported commodities. In the second quarter, the country imported fuel worth more than Nu 2.5bn.
Processing units form a huge component of import making it to the top 10 list with more than Nu 2.5bn in the first three months of the year. This too increased to Nu 5.2bn in the second quarter, forming a Nu 2.7bn increase compared to the first quarter this year.
Bhutan’s top exports include silicon, which earned the country Nu 4.8bn in the first quarter and another Nu 4.3bn in the second quarter.
Figures, however, show that the country’s trade balance began deteriorating since 2013.
The country experienced a trade deficit of Nu 29.1bn in 2019 against Nu 32bn in 2021. This shows that the trade deficit widens by Nu 2bn every year.
Statistics over the last five years (2018–2022) show that the country’s imports increased by almost 45%, and the increase in exports struggled at less than one-fourth of the import rate.
This also shows the dependence of the country’s economy on hydropower.
Kinley Yonten from Thimphu