Deficit narrowed by about Nu 100M last year compared with 2013
Statistics: The country’s trade deficit, excluding trade in electricity, is estimated at around Nu 9B (billion) between January to March this year. Balance of trade with India alone accounts for more than Nu 7B of deficit.
This was as per the provisional trade statistics for the first quarter, 2015. Bhutan imported commodities worth of over Nu 15B, while its export value was recorded at around Nu 6B. During the same period, its import bill from India accounted for Nu 12.6B, and exported goods worth Nu 5B to India.
As for electricity, although exact import and export figures may be known only at the end of the year, officials from hydropower sector said that generation during the first three months of the year (January-March) was quite low owing to poor hydrology in winter.
As for 2014, the trade deficit, including the electricity trade was recorded at Nu 21.3B, a decline of about Nu 100M compared to 2013. Trade deficit decreased by Nu 3.2B in 2013 compared with 2012.
The trade statistics, 2014, which was also published recently, show that, without the consideration of electricity export, the country’s trade deficit remained at Nu 31.6B. Bhutan exported Nu 10.6B worth of electricity, but also imported electricity of Nu 319M. In 2013, trade balance without electricity was negative Nu 32.4B.
While the drop in trade deficit in 2013 was attributed to the economic slowdown following the rupee shortage and various restrictions imposed on credit and import, lifting of the restriction and hydropower activities could widen the deficit this year.
For instance, statistics show that Nu 547M worth of vehicles were imported in 2013, the figure has jumped to more than Nu 2B last year, of which Nu 1.6B were imported from India. The vehicle import restriction was lifted in July last year.
A local economist said that Bhutan always maintained huge current account deficit during the construction phase of hydropower projects but gradually improved after commissioning.
The country maintained current account deficit as high as 30 percent of gross domestic product during the last phase of Tala. However between 2007 and 20078, when Tala was commissioned. the country recorded surplus current account one time.
Trade deficit is the largest component of the current account deficit. A nation has a trade deficit if the total value of goods it imports is greater than the total value of those it exports. Current account deficit takes into account all transactions between a nation and all of its international trading partners.
Apart from petroleum products, husked brown rice remained on the top 10 import list, accounting for Nu 1.1B last year. As for export, ferro silicon, products of iron, cement, cardamom and potatoes are among the top 10 exports.
From January till March this year about Nu 1.8B worth of fuel was imported.
By Tshering Dorji