Despite several fiscal measures the government had introduced to curtail imports and boost exports, the economy’s trade deficit has continued to increase from Nu 2 billion in January this year to Nu 7 billion in June.
The government said, some fiscal measures like the taxation has not really worked in curtailing imports with the country importing more than 8,000 cars since the ban on import of cars was lifted July last year.
Finance minister during the meet the press session today said, the current account deficit will only increase given the country’s huge dependence on imports.
Prime minister Tshering Tobgay said although there is a deficit in the current account, the overall balance of payments is positive. He said the deficit was mostly on account of investment in the hydropower sector where huge amounts of fuel and electromechanical components are imported in billions.
The investment, although it may lead to deficit build up in the short run, will ultimately add value to the economy, the Lyonchhen said.
