Amid the pandemic distorting global commerce, Bhutan has been able to successfully narrow its trade deficit. From Nu 21bn in 2019, the trade deficit was reduced to Nu 18bn last year. The trade deficit is the difference between the monetary value of a nation’s exports and imports over a certain time period.
According to the reports from the Department of Revenue and Customs, the increase in the export of electricity last year was one of the major factors that contributed to the narrowing of the trade deficit this time.
“One of the major reasons for narrowing the trade deficit is because our electricity export has increased. In 2020 the export of electricity was Nu 27bn compared to Nu 16bn in 2019,” said Rinchen Euden, the Assistant Collector Customs of the Department of Revenue and Customs.
She added, the increase in the export of electricity was mainly driven by the recent commissioning of the Mangdechhu Project in June 2019.
The change in the trade deficit was also attributed to the restrictions imposed by the government at the border gates with India. All border gates remained closed since March last year.
“The total import for the year 2020 including import of electricity was Nu 66bn, whereas export in 2020 including the export of electricity is Nu 48bn. Which gives us a trade deficit of around Nu 18bn in 2020. Whereas in 2019, we had a trade deficit of around Nu 21bn. So when compared to 2019’s trade deficit, there is a reduction of trade deficit by Nu 3bn. In terms of percentage, it’s narrowed by around 15 per cent,” she added.
Likewise, the sharp drop in the price of crude oil, the decrease in imports of raw materials in the manufacturing and construction sector, labour shortages and reduced external demand also played a vital role in narrowing the trade deficit.
Yeshi Dorji
