Economy of Bhutan

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The economy of Bhutan is based on agriculture and forestry, which provide the main livelihood for more than 60% of the population. Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult. Bhutan is among the richest by gross domestic product (nominal) per capita in South Asia, at $3,491 as of 2022, but it still places 153rd, and among the poorest in the world. The total gross domestic product is only $2.898 billion, and 178th according to IMF.

Bhutan's economy is closely aligned with India's through strong trade and monetary links and dependence on India's financial assistance. Most production in the industrial sector is of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labour. Model education, social, and environment programs are underway with support from multilateral development organisations.

Each economic program takes into account the government's desire to protect the country's environment and cultural traditions. For example, the government, in its cautious expansion of the tourist sector, encourages visits by upscale, environmentally conscientious tourists. Detailed controls and uncertain policies in areas such as industrial licensing, trade, labour, and finance continue to hamper foreign investment. Hydropower exports to India have boosted Bhutan's overall growth, even though GDP fell in 2008 as a result of a slowdown in India, its predominant export market.

Since 1961, the government of Bhutan has guided the economy through five-year plans in order to promote economic development.<ref>Template:Cite web</ref>

In the 1970s the King placed Gross National Happiness over Gross Domestic Product.<ref>Template:Cite web</ref><ref>Template:Cite web</ref>

On 8 December 2023, Bhutan graduated from the UN's list of least developed countries (LDCs), making it only the 7th country to do so and the first in 3 years.<ref>Template:Cite web</ref><ref>Template:Cite web</ref>

Macro-economic trend

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This is a chart of trend of gross domestic product of Bhutan at market prices [1] by the International Monetary Fund: Template:Static row numbers

Year	GDP (millions of BTN)	GDP (millions of USD)
1985	2,166	175
1990	4,877	279
1995	9,531	294
2000	20,060	460
2005	36,915	828
2008	45,000	1280
2011	84,950	1695
2014	119,546	1784
2017	159,572	2294

Bhutan's hydropower potential and its attraction for tourists are key resources. The Bhutanese Government has made some progress in expanding the nation's productive base and improving social welfare.

In 2010, Bhutan became the first country in the world to ban smoking and the selling of tobacco. In order to stamp out cross-border smuggling during the pandemic, a new Tobacco Control Rules and Regulations (TCRR) 2021 allowed the import, sales and consumption of tobacco products.<ref>Template:Cite web</ref>

Membership of economic organizations and agreements

In terms of trade, Bhutan is a member of the South Asian Free Trade Area (SAFTA) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the South Asia Subregional Economic Cooperation (SASEC).<ref name=":27">Template:Cite journal</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref> Bhutan is also a member of the pan-Asian Asia Cooperation Dialogue (ACD), and the Asian Development Bank.<ref>Template:Cite web</ref><ref>Template:Cite web</ref>

Bhutan first applied to join the WTO in 1999 and as an applicant, was quickly granted observer status<ref name=":0">Template:Cite web</ref> Beyond that, ascension proceedings at the WTO have been much delayed and periodically put on pause, largely stemming from concerns and considerations of the Bhutanese government itself.<ref name=":0" /><ref>Template:Cite web</ref><ref name=":1">Template:Cite journal</ref><ref>Template:Cite journal</ref> The Bhutanese government approved ascension to the WTO in April 2023, at least partly hastened by the country's upcoming graduation from the UN-defined 'least developed country (LDC) category.<ref name=":2">Template:Cite web</ref><ref>Template:Cite web</ref> Under WTO rules and processes, ascent of a country with LDC status comes with some leniency in certain requirements, more relaxed timeframes for compliance, and additional support;<ref>Template:Cite web</ref> so, whilst the loss of LDC status, as happened in December 2023, was a reflection of Bhutan's success and development progress, it also meant much further delay in WTO ascension (that is, ascent after the loss of LDC status) would make the journey through to full WTO member status even harder.<ref name=":1" /><ref name=":2" /><ref>Template:Cite web</ref>

Modern economic resources

Since the early 2020s, Bhutan has adopted cryptocurrency, particularly Bitcoin, as a strategic economic resource. Facing declining tourism revenue, youth unemployment (which reached 19% in 2024), and a growing brain drain, the government began mining Bitcoin using surplus hydropower during high-flow summer months. By 2023, Bhutan had sold $100 million in cryptocurrency to double civil servant salaries, leading to a drop in resignations. As of April 2025, blockchain analysts estimate Bhutan's Bitcoin holdings at over $600 million; around 30% of its GDP. Mining is powered by the kingdom's carbon-negative hydropower and cool climate, aligning with its environmental values. Bhutan also plans to develop Gelephu Mindfulness City, a sustainable economic hub.<ref>Template:Cite web</ref>