Causes Of Trade Deficit In Bhutan

757 Words2 Pages

As per Investopedia, “current account deficit is the measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the goods and services it exports”. This means that current account deficit occurs when there is more outflow of money in comparison to its inflow in the country. Bhutan being a small Himalayan nation faces negative balance of trade over the year and according to the Statistical Yearbook of Bhutan 2015 (p.182), the trade deficit of Bhutan amounted to Nu. 31,614.16 million.
Causes
Bhutan having such trade deficit is due to the huge import of oil, fuels, base metal, machinery, passenger vehicles, machinery, electrical appliances, wood and other food produces (Trading economics), changing from least developing country to developing country Bhutan has to import from the other countries. Though the country has industries it is not sufficient and more so the country does not have enough resources for self consumption. Consumption of necessities have increased the import of goods in the country, where spending of the consumers are leading to such trade deficit in the country. According to Dorji (2015 May 25), Bhutan has 7 billions of trade deficits with India and has …show more content…

According to Ura, K (2015 September) states, that in the year 2012, the top five borrowers that lead to the outflow of maximum rupee from the country are Royal Thimphu College, Lakhi, Druk Iron and Steel, Royal Insurances Corporation of Bhutan, Dungsum Cement Project and Tashi Corporation. The borrowing of the country leads to further increase in the trade deficit where in Bhutan at current state does not have the capacity to balance out its trade with the growing number of increased hydro power construction projects and small

More about Causes Of Trade Deficit In Bhutan

Open Document