ROYAL MONETARY AUTHORITY OF BHUTAN ANNUAL REPORT 2009/10

JANUARY 2011
 

                                         

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Royal Monetary Authority of Bhutan Chhophel Lam Kawajangsa Post Box No.154 Thimphu, Bhutan (975-2) 322540/323110/323111/323112 (975-2) 322847 rsd@rma.org.bt www.rma.org.bt

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CONTENTS PREFACE..................................................................................................................... 1  BOARD OF DIRECTORS .......................................................................................... 2  MANAGEMENT ......................................................................................................... 4  ORGANIZATION CHART OF THE RMA ............................................................. 5  ABBREVIATIONS AND SYMBOLS ........................................................................ 6  STATEMENT BY THE GOVERNOR ...................................................................... 9  BHUTAN KEY ECONOMIC INDICATORS ........................................................ 13 I. ECONOMIC REVIEW ......................................................................................... 15 1.DOMESTIC ECONOMY ...................................................................................... 16  1.1.  Primary Sector ................................................................................................. 18  1.2.  Secondary Sector ............................................................................................. 19  1.2.1.  Manufacturing ....................................................................................... 19  1.2.2.  Electricity and Water............................................................................. 20  1.2.3.  Construction .......................................................................................... 21  1.3.  Tertiary Sector ................................................................................................. 21  1.3.1.  Wholesale and Retail Trade .................................................................. 21  1.3.2.  Hotels and Restaurants ......................................................................... 22  1.3.3.  Transport, Storage, and Communication .............................................. 22  1.3.4.  Financing, Insurance, Real Estate, and Business Services ................... 22  1.3.5.  Community, Social Services (General Government) ............................. 22  1.3.6.  Private, Social, Personal and Recreational Services ............................ 23  1.4.  Tourism ............................................................................................................ 23 2. MONETARY AND PRICE DEVELOPMENTS ................................................ 24  2.1.  Monetary Developments .................................................................................. 24  2.2.  Review of Developments in Commercial Banking ......................................... 26  2.3.  Review of Developments in NBFIs ................................................................. 28  2.4.  Monetary Policy Instruments ........................................................................... 29  2.5.  Prices ............................................................................................................ 32 3. EXTERNAL SECTOR .......................................................................................... 34  3.1  Overall Balance of Payments ........................................................................... 34  3.2  Balance of Payments with India ...................................................................... 48  3.3  Balance of Payments with Countries Other Than India................................... 49  3.4  External Debt ................................................................................................... 50  3.5  Exchange Rate Developments ......................................................................... 52 4. GOVERNMENT FINANCE ................................................................................. 53  4.1.  Revenue and Grants ......................................................................................... 54  4.2.  Expenditure ...................................................................................................... 57 

4.3.  4.4.  4.5. 

Financing the Deficit........................................................................................ 59  Developments in Treasury Bill Operations...................................................... 59  2010/11 National Budget Estimates................................................................. 60 

5. WORLD ECONOMY ............................................................................................ 63  6. MACROECONOMIC INDICATORS FOR THE SAARC REGION.............. 65 II. GOVERNANCE AND ORGANIZATIONAL DEVELOPMENT ................... 70  1. Functions of the RMA ............................................................................................. 71 2. Overview of organization development 2009/10 ..................................................... 77 3. RMA Annual Audited Accounts, FY 2009/10 ........................................................ 83 III. STATISTICAL SECTION ................................................................................. 86 Table 1.  Gross Domestic Product by kind of activity at Current Prices.................... 87  Table 2.  Gross Domestic Product by kind of activity in 2000 Prices........................ 88  Table 3.  Sales of Major Industries ............................................................................. 89  Table 4.  Sales of Major Power Projects .................................................................... 91  Table 5.  Tourist Arrivals and Revenues .................................................................... 92  Table 6.  Monetary Survey ......................................................................................... 93  Table 7.  Royal Monetary Authority of Bhutan-Money and Banking Statistics ........ 95  Table 8.  Deposit Money Banks – Money and Banking Statistics ............................. 97  Table 9.   Bank of Bhutan Limited - Money and Banking Statistics........................... 99  Table 10.  Bhutan National Bank Limited - Money and Banking Statistics .............. 101  Table 11.  Bhutan Development Finance Corporation Limited – Money and Banking Statistics..................................................................................................... 103  Table 12.  Druk Punjab National Bank Limited – Money and Banking Statistics ..... 104  Table 13.  T-Bank Limited – Money and Banking Statistics ..................................... 105  Table 14. Royal Insurance Corporation of Bhutan Limited – Financial Statistics .... 106  Table 15. Bhutan Insurance Limited – Financial Statistics ....................................... 108  Table 16. Auctions/Tap Sales of RMA Bills/ Government Treasury Bills ............... 109  Table 17.  Financial Sector Investment by Economic Activity .................................. 110  Table 18. Summary of the Consumer Price Index ..................................................... 112  Table 19.  Indian Wholesale Price Index of all Commodities .................................... 113  Table 20.  Overall Balance of Payments Estimates .................................................... 114  Table 21.  Balance of Payments Estimates with India ............................................... 115  Table 22.  Balance of Payments Estimates with Countries Other than India ............. 116  Table 23.  Gross International Reserves ..................................................................... 117  Table 24A. Composition of Imports from India ........................................................ 118  Table 24B. Composition of Exports to India ............................................................. 119  Table 25A. Composition of Imports from Countries Other than India...................... 120 

........................ 130  Table 32..................... 138  Annex II................................................... 155  Annex V................................................................... 136 IV........................................................... 137 Annex I........................................ 178  Annex VII................  Foreign Debt Indicators for Convertible Currency loans .......................................  Exchange Rate............................................................... 123  Table 28...................... Summary of Petroleum Imports and Prices in Bhutan ....... Debt Servicing ........................................ ANNEXURES .....  Exchange Rate..  Summary of Budgetary Operations ............. 151  Annex IV........................... 192  Annex VIII..............  The Royal Securities Exchange of Bhutan.......................... Chronology of Important Financial Sector Developments ............................................................................................. Japanese Yen/US Dollar.............................................. Ngultrum/US Dollar ........................ Composition of Exports to Countries Other than India ..................... Convertible Currency and Rupee Loan Disbursements .............................. 201  .. Direction of Trade................. 121  Table 26.... 131  Table 33............. Information on Listed Companies .... 125  Table 29. 129  Table 31........... 162  Annex VI............... Royal Monetary Authority of Bhutan – Balance Sheet and Income and Expenditure Statement .... 134  Table 34......  Exchange Rate.............. Review of Performance of Bhutan’s Financial Sector.................................Table 25B............................................................................ Convertible Currency and Rupee ........................... 135  Table 35........ 128  Table 30....................................Year-Wise Expenditure on External Debt............................................... June 2010 ......................... Interest Rates ......................... 195  Annex IX...................... Bhutan External Debt ................. The Power Sector in Bhutan ....................... Tourism .............................. 122  Table 27... Developments in Bhutan’s Financial Institutions. Euro/US Dollar .. 143  Annex III........................................................................  Rupee Debt Indicators .............................

Comprehensive background data are available in the statistical section.PREFACE This report reviews developments that have taken place in the Bhutanese economy during the fiscal year 2009/10. while the annexure section provides additional detailed and updated information on selected economic sectors. The annual accounts of the RMA are published in accordance with the requirements stipulated in the Royal Monetary Authority Act of Bhutan 2010. We thank all those who have contributed to the information contained in this report. All views expressed in this report are those of the RMA and do not necessarily represent those of the data sources. . Nevertheless. A list of all the articles published by the RMA is outlined at the end of the report. Commentaries on the economic sectors are based on information provided by government authorities. An overview of events in the global economy and future developments for 2010/11 are also presented in this edition of the Annual Report. some important events which have occurred in the recent past have also been covered. and private sector sources. financial institutions.

Daw Tenzin Managing Director Royal Monetary Authority of Bhutan Member Secretary Mr. Kuenga Tshering Director National Statistics Bureau Member Mr. Dechen Tshering Deputy Managing Director I Operations Department Royal Monetary Authority of Bhutan Observer (As of June 2010) .BOARD OF DIRECTORS H. Lyonpo Wangdi Norbu Minister Ministry of Finance Chairman Mr. Sonam Wangchuk Director General Cabinet Secretariat Member Mr. Lam Dorji Secretary Ministry of Finance Vice-Chairperson Mr.E.

Dechen Tshering Deputy Managing Director I Operations Department Royal Monetary Authority of Bhutan Member Secretary (As of December 2010) . Sonam Wangchuk Ex-Director General Cabinet Secretariat Member Mr.BOARD OF DIRECTORS H. Nima Wangdi Director General Ministry of Finance Member Mr.E. Daw Tenzin Governor Royal Monetary Authority of Bhutan Chairman Dasho Karma Ura President Center for Bhutan Studies Member Mr. Mr. Loknath Chapagai Chief Industries Officer Ministry of Economic Affairs Member Mr.

Internal Audit Department Julien Gurung 9. Director. Director. Director. Financial Regulation & Supervision Department Eden Dema 5. Foreign Exchange Department Karma Rinzin 6. Banking Department Rinzi Lhamu 4. Information Technology Department Sherab Jamtsho 8. Administration & Finance Department Tshering Yangchen 11. Deputy Managing Director Dechen Tshering 3. Governor Daw Tenzin 2. Research & Statistics Department Pushpa Lal Chhetri 12. Director. Officer-in-Charge.MANAGEMENT 1. Credit Information Bureau Ugyen Tshering (As of June 2010) . Payment and Settlement Systems Department Jai Narayan Pradhan 13. Director. Director. Director. Director. Management Secretariat Namgay Tshering 14. Protocol & Hospitality Department Phub Dorji Tangbi 7. Currency Management Department Phajo Dorjee 10. Director. Director. Director.

Operations Department Management Secretariat Internal Audit Department Deputy Managing Director II. Policy and Programs Department Banking Department Payment & Settlement Systems Department Hospitality and Protocol Department Currency Management Department Library Financial Regulation & Supervision Department Research & Statistics Department Credit Information Bureau Administration & Finance Department Information Technology Department Foreign Exchange Department .ORGANIZATION CHART OF THE RMA Board of Directors Governor Deputy Managing Director I.

D Eastern Bhutan Coal Company Entrepreneurial Development Program .ABBREVIATIONS AND SYMBOLS Abbreviations ACU ADB ATM AWP BAIL BBCL BBPL BCCI BCCL BDFCL BDL BEVL BFAL BFPL BHL BIMST-EC BIT BNBL BOBL BOP BPC BPCL BRCL BST BTCL CAR CHPCL CIB CIT COTI CPI CRR DACL DPCL DPOP DPR DRC DSCL DSML EBCC EDP Asian Clearing Union Asian Development Bank Automated Teller Machine Army Welfare Project Bhutan Agro Industries Limited Bhutan Beverages Company Limited Bhutan Board Products Limited Bhutan Chamber of Commerce and Industry Bhutan Carbide and Chemicals Limited Bhutan Development Finance Corporation Limited Bhutan Dairy Limited Bhutan Eco-Ventures (P) Limited Bhutan Ferro Alloys Limited Bhutan Fruit Products Limited Bhutan Hotels Limited Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Business Income Tax Bhutan National Bank Limited Bank of Bhutan Limited Balance of Payments Bhutan Power Corporation Bhutan Polythene Company Limited Bhutan Resorts Corporation Limited Bhutan Sales Tax Bhutan Tourism Corporation Limited Capital Adequacy Ratio Chukha Hydro Power Corporation Limited Credit Information Bureau Corporate Income Tax Countries Other Than India Consumer Price Index Cash Reserve Ratio Druk Air Corporation Limited Druk Petroleum Corporation Limited Druk Plaster of Paris Limited Detailed Project Report Department of Revenue and Customs Druk Satair Corporation Limited Druk Stones and Minerals Export Company Limited S.

EFIC FDI FI FISD FSA FY GDP GEPF GOI IAIS ICBS IDA IFAD IFC IFS IMF INGO INR IPOs KFAED KHPCL KCL M0 M1 M2 MOE MOU NBFI NFA NPA NPL NPPF NRB NSB OIN PCAL PIT PPN PR 2002 QM Export Finance and Insurance Corporation Foreign Direct Investment Financial Institution Financial Institutions Supervision Division (RMA) Financial Services Act Fiscal Year (July-June) Gross Domestic Product Government Employees Provident Fund Government of India International Association of Insurance Supervisors Integrated Central Banking System International Development Association (World Bank) International Fund for Agricultural Development International Finance Corporation International Financial Statistics. IMF International Monetary Fund International Non Government/Profit Organization Indian Rupee Initial Public Offers Kuwait Fund for Arab and Economic Development Kurichhu Hydro Power Corporation Limited Kuensel Corporation Limited Reserve Money Narrow Money Broad Money Ministry of Economic Affairs (previously the Ministry of Trade and Industry) Memorandum of Understanding Non Bank Financial Institution Net Foreign Assets Non Performing Assets Non Performing Loans National Pension and Provident Fund Non-Resident Bhutanese National Statistical Bureau Other Items Net Penden Cement Authority Limited Personal Income Tax Purchasing Power of Ngultrum Prudential Regulations 2002 Quasi Money .

--+ Note: Discrepancies in the totals are due to rounding . causing a break in continuity fiscal year. July-June .RBI RGOB RICBL RMA RSEBL SAARC SAARCFINANCE SAFTA SBI SEDF SME STCBL SWIFT Reserve Bank of India Royal Government of Bhutan Royal Insurance Corporation of Bhutan Limited Royal Monetary Authority of Bhutan Royal Securities Exchange of Bhutan Limited South Asian Association for Regional Cooperation Network of SAARC Central Bank Governors and Finance Secretaries South Asian Free Trade Agreement State Bank of India South Asia Enterprise Development Facility Small and Medium Scale Enterprise State Trading Corporation of Bhutan Limited Society for Worldwide Inter-Bank Financial Telecommunications Technical Assistance Tourism Council of Bhutan Tala Hydroelectric Project Authority United Nations Capital Development Fund United Nations Economic & Social Commission for Asia & Pacific United Nations Development Programme World Trade Organization TA TCB THPA UNCDF UNESCAP UNDP WTO Statistical Abbreviations and Symbols e p r estimated provisional revised estimates the figure is zero or less than half the final digit shown or the item does not exist or the figure is not available the figure is unknown or is not meaningful or is not to be published change within a time series.

as well as works on the hugely anticipated Education City as a destination for innovation and excellence in education and technology by 2020. driven by accelerated performance in the construction and services sectors (including transport. The momentum of global economy is reflected in the International Monetary Fund’s revised projections for global growth. This is matched by great expectations from the completion of the Thimphu IT Park. Further opportunities are presented for local industry and commerce on the bilateral front.7 percent.). growth performance in the agricultural sector improved during the year.9 percent during 2009.STATEMENT BY THE GOVERNOR FY 2009/10 has been a year of exceptional achievements for Bhutan and its people. and legacy under His Majesty’s philosophy of Gross National Happiness (GNH).4 percent in 2011. Bhutan has clearly come into its own. growth is expected to stay strong for the remainder of the 10th Five Year Plan growing on average by approximately 9 percent per year for the remaining years of the Plan period. and Foreign Direct Investment Policy 2010. gaining greater international recognition for its untiring endeavors to pursue GNH-centric goals. Developing Asia is projected to grow by 9. and ongoing talks to finalize a Preferential Trade Agreement with the Government of Nepal. and will continue to grow by 8.4 percent during 2010. with the renewal of the Agreement on Trade between the RGOB and Bangladesh Government in November 2009.7 percent during 2009. unique cultural heritage. Improved performance in these sectors reflects ongoing pre-construction as well as construction works on the new hydropower projects. And this is clearly demonstrated by our recent commitment to begin phasing out hydro-chlorofluorocarbon (HCFCs) substances from 2013 by 2020 under the Montreal Protocol. . up from 6. storage and communications etc. propelled by continuing developments in Bhutan’s hydropower sector. real GDP growth was higher at 6. The RGOB’s new fiscal and economic packages encapsulated in the Economic Development Policy 2010. its location holding great significance in the Fund’s efforts towards poverty alleviation and closer regional economic integration. hold great promise and potential to support and boost private sector growth and create numerous employment opportunities for national economic self-reliance. up from the previous year’s growth of 4. negative performance was more pronounced for the hotels and restaurants sector during the year. whereas 2009 recorded contraction in the growth of the electricity and the mining and quarrying sectors. Meanwhile. but that of the developing and emerging economies to be much stronger. In that connection. a model public-private partnership venture during 2010/11. real GDP growth in Bhutan remained robust at 6. This was followed with the momentous inauguration of the SAARC Development Fund in Thimphu.7 percent in 2009. The nation hosted the historic 16th SAARC Summit for the first time in Thimphu that showcased the nation’s vast socio-economic progress. Fiscal Incentives 2010. Within the Bhutanese economy. which is expected to remain sluggish in most advanced economies and some emerging economies.

1 billion. Inflationary conditions worsened during the year due to a considerable increase in both food and non-food prices.Foundation stones were laid for the Punatsangchhu II and Mangdechhu hydropower projects on May 1. construction works on the Punatsangchhu I hydropower project continues on track and is scheduled for completion by the end of 2015. and annual inflation rose to 6.50.1 percent compared to the previous year driven by growth in net foreign assets and domestic credit.6 percent for the fiscal year compared to a growth of 31. and the introduction of 2 new commercial banks and one new insurance company. while that for the Dagachhu project commenced October 2009. The Punatsangchhu II and Mangdechhu projects are due for completion the following year in 2016.4 billion. Moreover. Once commissioned.8.2 percent to Nu.13. Monetary expansion in Bhutan continued in 2009/10 with broad money expanding by 30.1 percent during the second quarter of 2010 in contrast to the low of 3 percent during the same period last year. credit to the private sector continued its expansion by 38. In spite of the tapering impacts of the global economic slowdown. of which almost 90 percent belonged to the commercial banks and the remaining 10 percent to non-bank financial institutions. FY 2009/10 reiterated Bhutan’s susceptibility to contingent circumstances and external vulnerabilities. mostly due to the re-categorization of the BDFCL as a banking institution after receiving its license in March 2010. Meanwhile.8 percent to Nu.3 percent as of the FY 2008/09. these issues must be kept central during planning processes.5. More importantly. However. with more players in the market and in light of the rapid credit growth. RMA is aware of the necessity to enhance supervision over banks’ risk management practices and financial disclosure to safeguard and maintain desirable asset quality and financial sector stability. the financial system’s non-performing loan ratio has also improved. India remains Bhutan’s largest trading partner. accounting for 92 percent of . and at the core of the Royal Monetary Authority’s policy actions. dropping to 10. the entry of new banks and non-banking institution has injected muchneeded competition into Bhutan’s financial system. with the financial institutions well capitalized.5 percent to Nu. demonstrated by natural calamities and fluctuating oil and essential food prices on imports that have had considerable fiscal implications and adverse impact on local consumption. Banking sector assets grew by 36. While growth prospects appear favorable for Bhutan. Developments in Bhutan’s external sector as indicated by the balance of payments statistics were characterized by a widening in the current account deficit to Nu.1 percent during 2008/09.480 MW. and targets completion by 2013.3 percent from 18. The combined assets of the financial sector grew by 28.8 billion. Mindful of the vulnerabilities associated with Bhutan’s small economy case. 2010 by Bhutan’s Prime Minister Lyonchhoen Jigmi Y Thinley and Indian Prime Minister Dr. performance of the Bhutanese financial sector was robust during 2009.45. while that of the non-bank financial institutions declined by 13. Meanwhile. This has been underpinned by substantial widening of the trade deficit due to rapid growth in merchandise imports.9 billion. which has resulted in a more than doubling of the trade deficit to Nu.5 billion. Manmohan Singh and pre-construction works are currently underway. the operation of all four power plants is estimated to augment Bhutan’s hydropower generating capacity more than four-fold from the existing 1. Once the RMA’s Financial Services Act is formally endorsed in the coming fiscal year. this will empower the RMA to further introduce new avenues and opportunities for innovative financial market providers that will meet the diverse financial needs of private sector and general public.

and was completely financed by domestic revenue amounting to Nu. for the daily transfer of Rupee balances to meet the banking sector’s requirements. Corresponding to the surplus in the balance of payments.8 billion.9 percent of GDP in 2008/09 to 49.5.9 billion were a large factor in building the surplus in the capital and financial account balance which totaled Nu.5 percent of GDP. sufficient to finance 12.4.6 billion. Entrusted with managing the nation’s international reserves.exports and 72 percent of imports during FY 2009/10. 2010.3 months of commodity imports.15. the Authority has now delegated the exchange of Ngultrum with Indian Rupees to the commercial banks with effect from May 1.7 percent of GDP attributed to the incorporation of additional budget allocations for both capital and current expenditures during the financial year.9 billion. These capital and financial flows helped finance Bhutan’s current account deficit. the Authority has also entered into a special agreement with the State Bank of India.5 percent from 30. the principal and interest repayments towards the State Bank of India Overdraft Facility alone amounted to Nu. Bhutan’s balance of payments flows continue to be dominated by developments in the hydropower sector and flows of official aid in grants and loans. And combined with the worsening in the services and income accounts. Total expenditure grew from 40.1 percent of GDP in 2009/10.13.7 percent of GDP in the 2009/10 revised budget from a surplus of 2 percent of GDP in 2008/09. accounting for 39 percent of total exports during the fiscal year. total revenue including grants.4. or 63. Indian Rupee denominated debt constitutes 58. Of the total deficit. while capital expenditure estimated at Nu.7 billion at the end of June 2010.7 percent of GDP to 14.5 percent in the previous year. Individuals will be able to access unlimited Rupees above a limit of INR 40. At the end of the FY 2009/10.3 percent of GDP in 2009/10. this responsibility has become immensely challenging due to the need to ensure adequate Rupee reserves to safeguard the integrity of the exchange rate peg with India. Bhutan’s debt service ratio continues to remain elevated at 29.3 billion. Net inflows of capital grants (largely associated with the Punatsangchhu I hydropower project) and concessional publicly guaranteed loans to the tune of Nu.7 million. with a final overall surplus in the balance of payments of Nu. With the ongoing State Bank of India Overdraft Facility. the Ngultrum’s fixed peg to the Indian Rupee has placed additional pressure to ensure adequate Rupees to meet the economy’s requirements. Bhutan’s external debt outstanding totaled USD 840. Grant support helped finance 34. Following last year’s plans to design a new strategy to streamline Rupee management and circulation in Bhutan. Bhutan’s official international reserves grew to USD 868.4 billion. Current expenditure was estimated at Nu. And with the nation’s widening current account deficit with India. 16 percent was financed through external concessional borrowing and the remaining through domestic sources. Hydropower exports to India are still the most important export.9 percent of GDP to 43. Bhutan’s current account deficit expanded from 1.1 million for the year ending June 2010. Bhutan’s fiscal policy remained progressive during the review year with the national budget deficit increasing to 6. Moreover.16.2 percent of total expenditure.1 percent of Bhutan’s external debt and Rupee denominated debt expanded substantially during the year on account of borrowings from the Government of India towards the construction of the Punatsangchhu I hydropower project. increased marginally from 42.000 based on the submission of supporting documents. On the other hand. . Hashimara.

the Authority initiated the drafting of several key policies for the financial sector including the Microfinance Regulations. to enhance our capacity to effectively steer financial sector and macroeconomic growth for national socio-economic welfare. The RMA celebrated the historic inauguration of the Electronic Fund Transfer and Clearing System in June 2010. in keeping with the vision and legacy that has emanated from the Golden Throne. the Authority expresses its appreciation to its valued stakeholders in the Royal Government and financial sector for their continued cooperation and support. as the central function of the Authority to initiate appropriate policies with the objective of maintaining price stability. In accordance with the enacted RMA Act of Bhutan 2010. It is our hope that these efforts will go a long way to promote and enhance the general public’s understanding of the financial sector to enable them to make sound financial decisions and to avoid predatory lending and credit schemes. Just as the nation and Government have strived to strengthen its footing in the new dynamics of democracy. Branchless Banking Regulations. The Authority has also declared a moratorium on the issue of commercial bank licenses till 2015 in line with economic market survey assessments. during which time the Authority also hosted for the very first time. Daw Tenzin Governor January 11. and the Establishment of Re-insurance companies in Bhutan. Anti-Money Laundering Regulations. Furthermore.FY 2009/10 has been a year of sustained growth and positive institutional transformation. commencing 2011. Meanwhile. Corporate Governance Regulations. 2011 . the Authority in collaboration with other financial institutions conducted another round of the Financial Literacy Program early 2010 in six key districts. the Authority shall formulate and publicly present the annual monetary policy statement in Parliament. particularly for the nation’s Central Bank. We reaffirm our commitment to serve the people of Bhutan. so also the Royal Monetary Authority has endeavored to consolidate its position and powers through the new Royal Monetary Authority of Bhutan Act of Bhutan 2010. during the year. and external and financial sector stability to facilitate sustained economic growth in the country. the 39th Meeting of the Asian Clearing Union Board of Directors in Thimphu. At the close of FY 2009/10.

4 -4090.5 23443.5 13542.0 2061.0 482.6 12794.0 -4322.8 10.6 4.8 3.8 403.4 10.2 25208.1 6000.5 8.1 38.6 4. (b) Ngultrum per USD (fiscal year period average) Money Supply.4 1957.7 3.4 17.0 4.8 -4002.5 1092.3 -2921.0-16.5 6.1 .4 54713.3 2215.0 10.7 15.8 4.2 1578.6 655.3 37.7 35236. end of period) Broad Money.5 33074.6 16083.5 29.2 3163.0-16. M1 (end of period) Counterparts Foreign Assets (Net) Domestic Credit Claims on Private Sector 2006/07 2007/08 2008/09 2009/10(p) 6.4 7.6 2100.5 18373.4 2390.0 18.3 -1098.5 868.2 -2.1 22350.6 -2613.1 30.6 31.0 3.0 15122.7 18316.4 2655.4 5421.2 -142.9 5935.7 -14.7 22537.5 40673.8 287.3 6139.5 5806.2 15.1 14.9 8.4 24.0 6.3 772.0 -6.8 4.2 13890.8 80.8 -1080.8 4447.8 5.4 26365.0 2.0-16.3 70.3 24881.6 35.5 44.1 794.5 21811.3 9345.9 15795.) Trade Balance With India Current Account Balance (In percent of GDP) With India (In percent of GDP) Foreign Aid (Concessional Loans net) Of which: India Errors and Omissions Overall Balance (In percent of GDP) External Indicators (end of period) Gross Official Reserves in Millions of USD (In months of merchandise imports) External Debt (percent of GDP) Debt-Service Ratio (f) Memorandum Items: Nominal GDP (in millions of Nu.9 -1.4 17913.3 -6091.7 6.8 32113.0 6575.5 40.0 61222. M2 Credit to Private Sector Interest Rates (end of period) One Year Deposits Lending Rate 91-day RMA Bills/ Treasury Bills Balance of Payments (in millions of Nu.5 4193.4 25780.6 6417.8 9.4 30451.8 4401.7 49456. (b) Consumer Prices (c) Wholesale Prices (India) (d) Government Budget (in millions of Nu.1 10.6 -2.0 10.1 12.1 25246.3 63.2 13.) (a).1 10423.1 10111.2 608.BHUTAN KEY ECONOMIC INDICATORS Indicator GDP Growth and Prices (percent change) GDP at Constant (2000) Price (a).2 -278.3 12.0 10.8 5694.6 -27.5 26361.7 18216.8 5882.0 0.5 6.3 1015. M2 (end of period) Money Supply.0 47.5 4.6 46.1 30.3 -30.4 -13938.6 -4933.4 67.) (e) Total Revenue and Grants Of which: Foreign Grants Total Expenditure and Net Lending Current Balance Overall Balance Money and Credit (percent change.5 783.0-16.6 -948.4 12.5 2.7 -8754.4 -0.7 14392.7 41778.9 5.

0 a) On a calendar year basis.6 11388. 1993-94 base.7 14683. NSB .0 10376. e.8 10751.2 19241. The CPI reflected in this table is for the last quarter of the fiscal year.7 1.-(g) Data for 2005 is from the Population & Housing Census of Bhutan 2005.8 14696. Labour Market Information Bulletin (2009).2 1.6 9982.2 2. of which Banks' Deposits Money Multiplier (M2/M0) Income Velocity (GDP/M2) Population Growth Rate (a). Rates of change (year-to-year) for the quarterly CPI are therefore not available prior to Q3.3 1. 2004.Item Components Currency Outside Banks Demand Deposits Quasi-Money Reserve Money .5 9810.e) Data for 2009/10 are revised estimates. (h) Unemployment Rate (a).0 1. the entry under 2006/07 is for 2006.2 2007/08 3640.3 4.7 2.0 1. .0 8685.b) Source: National Accounts Statistics (2009).3 n/a 5386.9 1. .4 13319. reference period same as for Bhutan CPI .2 13739.9 2.0 20574.5 17151. The unemployment rate for 2009/10 is as of 2009 (Source: NSB and Labor Force Survey 2009).3 3.. Wholesale Price Index of All Commodities.6 1. (g).3 12871.-(h) Source: Comparative Socio-Economic Indicators for Bhutan. This was replaced by a new quarterly CPI with a revised basket and Q3 of 2003 as the base.g.0 1. M0. . (h) 2006/07 3166.8 13833.9 1. d) Source: Reserve Bank of India.c) Data till 2002/03 are based on the old half-yearly average CPI of the NSB (1979 base year).3 11666. MLHR.f) Debt service payments in percent of exports of goods and services. NSB.3 3.7 2008/09 2009/10(p) 4541.

ECONOMIC REVIEW .I.

5 percent from 67. and change in the CPI computation methodology (from half-yearly to quarterly index). As of 2009. community and social services. cannot be directly compared. and hotels and restaurants.3 percent Labor Force Participation Rate (2009) Male: 72. 2003. Unemployment rate (2009) Male: 2. 2009’s GDP growth rate is below the preceding 5-year average growth rate (7 percent) since 2003. In 2009. insurance and real estate. followed by the secondary sector (manufacturing. Bhutan’s per capita GDP/income was recorded at USD 1. CPI (% change) 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Real GDP CPI In 2009. Note: Due to a break in continuity from Q3. Data reveals that approximately 80 percent of those unemployed fall under the age group of 15-24 years. forestry and logging.1. social and recreational services) was the main contributor during 2009. storage and communication.6 percent Female: 5.1 Real GDP. and private. livestock production. electricity. and construction) and primary sector (agriculture proper. (wholesale and retail trade.4 percentage points in 2008 to 3.7 percent last year. transport.8 percent Female: 64.9 percentage points in 2009. Bhutan’s labor force participation rate grew marginally to 68.4 percent In 2009. mining and quarry. DOMESTIC ECONOMY Bhutan’s real GDP grew by 6. prior to and after FY 2003/04. However. the growth in the services sector was also recorded significantly higher as compared to 2008. the two periods data. electricity. the tertiary sector. Bhutan’s real GDP growth accelerated to 6. and forestry sectors improved during 2009. A substantial decline in growth was also recorded in the manufacturing and private. service-providing sectors. 2009/10 Source: Labor Statistics.852. and transport.7 percent during 2009.7 percent in 2009. A similar improvement was witnessed in the case of the construction sector. including community and social services. . and mining and quarrying). negative growth was recorded in three sectors namely. livestock. As a percentage of real GDP growth. financing. the overall performance of the agriculture.5 percent 20 18 16 14 12 10 8 6 4 2 0 Chart 1. and unemployment has risen to 4 percent (2009) from 3. hotel and restaurant. Although the performance of the economy was progressive during 2009. In particular. social and recreational services in 2009. The forestry and logging sub-sector revived from its negative growth of 1. MOLHR. storage and communication recorded robust growth.

8 percentage points in 2002. while.2 Sectoral Composition of Nominal GDP 70000 60000 50000 40000 30000 50 45 40 35 30 25 20 Within the tertiary sector. tertiary (right hand) business services at 6. Chart 1. the 15 community and social 20000 services sector grew by 28.Table 1.1 Real GDP Growth by Sector: 2005-2009 Year-to-year change in % Item Gross Domestic Product Primary Sector Secondary Sector Tertiary Sector 2005 7.7 percentage points as compared to 1.1 12.2 percentage points in 2004. social and recreational services declined to 1. and finance.3 Primary Secondary percent.5 5.2). In terms of contribution to overall GDP growth (Refer Table 1. hotels and restaurants experienced negative growth of 12.6 10 10000 percent from 3.4 7. and 3.9 percent in 2008.8 percentage points in 2008.6 5.9 3.9 2.1 percent and 1.5 4. Tertiary % growth.2 percent followed by the secondary sector and primary sector at 4.3 13. Discrepancies in the figures are due to rounding.2 percent.0 3.9 percent in 2009 as against 45. Meanwhile.5 percent in 2008. Millions of Nu. real estate and % growth. growth in the secondary sector was moderately lower at 4. while. followed by transport.1 percent as compared to 5. the primary sector witnessed contraction by 1.7 1.2 percent from 0.2 Source: National Statistics Bureau.3 2007 17. During 2009.6 percent.7 2.1 percent in 5 2008.0 percent. However. growth in private. 5.7 8.4 percent in 2008.1 2.9 2008 4.9 percent from 5. . the tertiary sector recorded the highest growth by 12. While reviewing major sector-wise growth for 2009. primary (right hand) insurance.6 percent.5 41.8 2009 6. Growth in wholesale and retail trade increased to 6.7 2006 6. secondary (right hand) % growth.2 percent from 5. down from 2. 0 0 storage and communication 2005 2006 2007 2008 2009 at 9. this sector’s contribution to GDP accounted for 4. the tertiary sector’s growth contribution fluctuated over the years.6 4.2 percent from 5. respectively.5 percent in 2008 (due to negative growth in the electricity sector).

2 0.5 percent in the previous year. Primary Sector 1.0 0.2 0. storage and communication. and transport.1 0.2.3 1.5 0.0 0.9 0.4 5.9 0.2 0.1 0.1 The share of tertiary sector to nominal GDP has remained relatively consistent over the years.9 2.5 2002 I.2 percent in 2002.1 0.5 0. 0.1 1.0 0.7 0.3 0. Public Administration 10.1 0.0 3.1 3.5 0.1 0.7 2009 0.0 0. Construction III.3 Forestry & logging 2. as compared to 20. the tertiary sector constituted 39.5 3.9 1.Table 1.4 14.1 0.8 0.2 Real estate 9.2 6.8 1.5 0.0 2.9 0.9 0.6 -0.0 1.1 0.4 percent in 2008.1.5 0.0 0.0 0. the primary sector contracted by 1.4 percent in 2004 and 37. Hotels & restaurants 8.3.4 0.2 0.1 0.1 0.0 0.4 2.7 0.1 -0.4 -1.7 0.0 1.1 0.9 0.9 3.1 0.0 0.4 0.2 0.3 1.0 0.0 0.2 0. they recorded shares of 20.0 -0.1 0.1 Agriculture proper 1.3 -0.7 0. & communications 9.2 0. the sector’s contribution to real GDP growth declined marginally from 0.0 1. Financing.6 percent down from 2.5 percentage points in 2008 to 0. Correspondingly.4 0.3 0.8 0.6 1. In 2009.2 2. Mining & quarrying II.3 percentage points in 2009.6 1.3 0.3 0.0 1. and a structural shift in the case of 2009 was largely driven by developments in community and social services (general government).8 percent of GDP compared to 38.1 Primary Sector In 2009.6 0.8 0.3 -0.5 -1. & forestry 1.0 0.4 1.2 0. Secondary Sector 3.0 0.8 0. Looking at the primary and secondary sectors. Plus: taxes net of subsidies Source: National Statistics Bureau.1 0.3 0.1 Finance 9.5 0.1 0.6 -1. Private social & recreational services 12.3 0.1 0.1 0.1 0. insurance.5 percent and 39.3 -0.3 0.1 0.7 0.5 0.1 0.7 0. Tertiary Sector 6.2 0.2 Livestock production 1.1 0.2 1.6 3.1 0. Education & health 11.0 12.0 -0.1 0.2 0.0 0.7 2. 1.8 4.4 0.5 0.1 -0.5 5. The sectoral trend and composition of nominal GDP reveals a much faster growth in the secondary and tertiary sectors.0 0.6 2.4 0.5 0.1 1.3 0. manufacturing.0 0.5 0.8 -0. Wholesale & retail trade 7.3 0. real estate & business services 9.3 0. livestock.4 0.4 0.2 1.5 0.1 0.4 1.Business services 10.2 0.7 percent and 40. Manufacturing 4.0 0.0 0.9 1.5 0.2 1.5 0. Electricity 5.9 -1.8 0.8 0.1 2.2 Real GDP Growth by Sectoral Contribution: 2002-2009 Real Contribution to GDP growth (%) 2003 2004 2005 2006 2007 2008 0. construction.6 0.3 3.24 0.1 2.1 1.7 2.9 percent in 2008 respectively. Community and social services 10.7 4. Agriculture.0 1. 40.7 percent in 2009. and financial services sectors.3 0.0 0.0 0.0 0.7 -0.7 0.1 0.2 0.9 0.1 0.6 -0.2 -0.2 0. Transport.1 -0.8 0.6 0.7 0. storage. This sector’s share to .5 0.0 0.

7 percent during the previous year. In real 5000 terms.9 and 0.2 and 2. A sharp fall in the growth of the manufacturing sector and negative growth in the electricity sector are the main factors for its decline.9 percent from 8. 1.nominal GDP also declined slightly from 20.5 percent and 17. respectively. Looking at Chart 1.9 percentage points in 2009. this sector’s share to nominal GDP stood at 39. In 2009. down from 8.2 percent in 2008.2 Secondary Sector Real growth of the secondary (industry) sector declined in 2009 to 4. Penden Cement Authority Limited (PCAL) was ranked as the largest seller of manufactured items (in both domestic and export sales). the primary sector’s share to nominal GDP was recorded at 20. Major industries which 3000 fall under this sector includes cement.9 percent in 2009). and major cash crops.6 4000 percentage points in 2009. It also covers small unregistered 0 activities such as weaving. rice. The positive Millions of Nu. coal. gross value addition (GVA) from the manufacturing sector over the past 5 years continued to grow steadily. calcium carbide. respectively. This Addition. Of Bhutan’s 6. down from 20.3.7 percentage points to 0. and livestock recorded improved growth of 2. ferro2000 alloys.9 percent in 2008. the growth in other primary subsectors. of real nominal Bhutan’s top 11 major industries.5 percent in the previous year.2 percent of nominal GDP in 6000 2009. and cardamom). potatoes.4 percent in 2008. Similarly.1 percent from 5. agro-based 1000 edible commodities.5 percent in 2009 from negative 10. 1.9 percent.8 percentage points was contributed by the secondary sector. with a corresponding fall in its contribution to overall real GDP growth. particle board products. thangka (wall 2005 2006 2007 2008 2009 hanging) painting and clay work.4 percent in 2009 from 1. wheat.4 percentage point contribution in 2008. and polythene pipes.5 percent in 2009. followed by Bhutan Ferro Alloys Limited and Bhutan Carbide and Chemicals Limited at 26. In 2009.3 Gross Value to 6. However. Manufacturing sector constituted 8. its contribution to overall GDP growth fell slightly from 0. . Of the total turnover of the manufacturing industries.5 percent in 2008.1 Manufacturing Real growth in the manufacturing sector dropped Chart 1. However. ginger.4 percentage points in 2008 to 3. Overall. The GVA is a measure of the contribution to GDP made by this sector (value of output less the value of intermediate consumption).7 percent in 2008 to 20. namely apples. the construction sector witnessed a positive growth of 16. down from its 2.6 percent of total sales belonged to PCAL. the performance of the forestry and logging sub-sector improved from a negative growth of 1.1 percent in 2008 to negative 6.5 percent in 2009. 27. 1.5 percent in 2008. liquor.7 percent real GDP growth in 2009. oranges.7 percent as compared to 40.2. including agriculture proper (principal crops. Accelerated growth in the construction sector is driven largely by hydro-power and related infrastructural development activities. namely maize. This is mainly attributed to the negative growth performance of the mining and quarry sector (20.

2 Electricity and Water Electricity in Bhutan generated from Chart 1. However.4 Electricity Sector hydropower is heavily dependent on the 12000.1 billion in 2008.1 percent in 2008.3 percent in Power export. This is 100.4 percent in 2009. However.trend in GVA revealed that the Bhutan’s manufacturing sector continued to remain progressive despite several structural constraints.0 sectors. and power exports) has also expanded from Nu.4 percent) and Basochhu at 3. In 2009.1 percent). declining from Nu.0 to Nu. the water sub-sector (excluding electricity) has grown by 4.27 million in 2009 compared to Nu. Millions of Nu (right hand) 2009 compared to 21. the 2000.0 10000.5 billion in 2009. dividend payments.5 percent over the previous year.2.0 clearly revealed in the electricity and water 80. Total energy sales from the four major power plants (Tala Hydroelectric Project Authority.9 billion from Nu.11 billion in 2008 to Nu. % . Chhukha Hydropower Corporation Limited. the water and sewerage sub-sector contributed Nu. the Tala Hydroelectric Project Authority (THPA) contributed 58. Meanwhile.8 percent. Its sectoral contribution to national revenue (through the transfer of corporate income tax.26 million in 2008.8. during the same period.0 2005 2006 2007 2008 2009 0.8 billion in 2008 to Nu.1 percent (2008: 60. overall domestic sales grew by 7.3. As a result. Of the total electricity sales by the above hydropower projects. Overall.1 percent (2008: 31.0 0.0 8000.0 6000.3 percent (2008: 4. Kurichhu Hydropower Corporation Limited and Basochhu Hydropower Corporation Limited) during 2009 recorded negative growth of 7. the gross value added contribution from water services under the electricity and water sector also grew during 2009. owing to increased sales from CHPCL and THPA.3 percent). It has nonetheless improved by a huge margin real growth in electricity % compared to the pre-Tala hydropower plant Contribution to national revenue.5 percent during 2009.0 negative 2.0 availability of rainfall during the monsoon 120. Millions of Nu establishment in 2007.0 electricity and water sectors witnessed a 40.0 real value of electricity and water contracted -20. in real terms.7 percent. 1. the total exports of electricity to India registered a negative growth of 8.0 and the winter snowfall periods.10 billion in 2009. followed by the Chhukha Hydropower Corporation Limited (CHPCL) at 34. Kurichhu at 4. The share this sector to (right hand) nominal GDP was recorded at 19. Corresponding to the increased coverage of the municipal water facilities in various urban areas. the real growth of the 60.9 percent).9.5 percent (2008: 3.0 significant decline from 13 percent in 2008 to 4000. the contribution of water services to GDP expanded. In 2009. Details of the production and sales of all four plants are available in Table 4 while a detailed description of developments in Bhutan’s power sector is presented in Annex V.2.0 20.

3 percentage points in 2009. and recreational services sector Transport.0 significant expansion in the growth of the 34.0 6000. the private.0 Credit towards construction.3.8 percent in 36.2 percent growth in the previous year.0 5. Millions of Nu (right hand) Annual real growth (right hand) % share to GDP Bhutan’s tertiary sector’s performance improved in 2009 with 12.3 Tertiary Sector % 2005 2006 2007 2008 -5. The share of this sector to nominal GDP was recorded at 12.0 10.0 2009 from 38.0 4000.0 30.0 7000. storage and communication 2005 2006 2007 2008 2009 32.6). Correspondingly. primarily contributed for the -10. Similarly.2 percent 38.3 Construction Chart 1.0 5000. Its contribution to overall real GDP growth increased from 0.0 2009 2000. its share to nominal GDP stands at 4.0 0.5 Construction Sector 20.2 percent in 2008. On the other hand.0 community and social services.000 MW by 2020.0 sectors. Public administration social.1.6 Other Emerging Tertiary Sub-Sectors % change 1. 1. this sector’s share to 40.0 -15. Chart 1. .0 % share to GDP(right hand) increase. and 0.8 percent during 2009.5) during 2009 against 7.9 percent as of 2009. wholesale Wholesale and retail trade and retail trade and financing.0 -10.4 percent in 2008.7 percent (Chart 1.0 15. social.0 nominal GDP expanded to 39.9 percent compared to 45. Meanwhile.storage & communication witnessed a significant decline in its growth during 2009. A 20.0 growth compared to 4.9 percent in 2008 to 6.0 With the commencement of construction works on both the Punatsangchhu I hydropower project in Wangduephodrang and the Dungsam Cement Project in Nganglam.1 Wholesale and Retail Trade Real growth in wholesale and retail trade increased from 0.0 0. the construction sector recorded impressive real growth of 16.4 percent in 2008 (Chart 1.8 percent in 2008.2 percent in 2009. insurance Finance and insurance and real estate also registered Real estate improvement in their real growth during Education and health Private.5 percent in 2009 against negative 10.0 3000.2 percent as of 2009.0 transport. personal and recreational services the review period. It is projected that construction activities within this sector will gain momentum with the RGOB’s plans to achieve 10. down from 4.0 10.05 percentage points in 2008 to 0. Meanwhile. the hotels and restaurants sector experienced negative growth of 12.2.0 1000. Sector-wise credit by financial institutions also revealed an increase in the growth rate of credit allocated towards the building and construction at 14.0 50.

9 percentage points in 2009. real growth in this sector increased from 5.5 Community and Social Services (General Government) Community and social services (general government) recorded strong growth of 28. there was a marginal decline in this sector’s share to nominal GDP to 8. Storage. followed by telecommunications with 17 percent. and business services grew by 20. while growth in real estate rose to 3. Within this sector. growing by 6.4 percent in 2008. and Business Services Finance.1 percentage points in 2009 from 0.3 percentage points in 2008.6 percentage points during 2009. Correspondingly. For an overview of sectoral developments in the Bhutanese tourism industry.4 percent).4 and Annex IV of this report.7).7 Real Growth in with developments in Bhutan’s tourism industry. Of the gross value added of Nu.8 percentage points in 2009 (2008: 5.6 percentage points).3 percent in 2008 to 9.4 Financing. In tandem. during 2009.3. largely on account of the backlash of recent global recession and avian flu 2007 outbreak. 66 percent is constituted by land transport. its contribution to real GDP growth expanded slightly from 0. attributed to the increase in civil service salary and the introduction of other allowances in the civil service. Insurance. As Hotels and Restaurants evidenced with the recent fall in the inflow of 2009 tourists. this sector experienced lower growth 2008 during the review period. Real Estate.3. and Communication On account of increased construction and transportation activities associated with the new hydropower projects and due to an increase in the number of mobile services and users in the country. financial institutions’ real performance remained robust.4 percentage points.1.9 billion to overall GDP in 2009.8 percent in 2008 to 9. followed by public administration services at 20.8 percentage points. Decreasing annual tourist arrivals have driven corresponding growth developments in the -20 -10 0 10 20 30 40 50 hotel and restaurant sector.1 percent in 2009 from 8.1 percent in 2008.2 percent in 2009 compared to 5 percent in the previous year. growth in education and health was recorded highest with 42. 1. the share of community . please refer to Section 1. 1.6 percent in 2009 compared to 3. and air and other transport at 16 percent. However. with the RGOB’s efforts and plan to attract 100. Growth in the latter was % change registered at negative 12. its contribution to nominal GDP declined to negative 0.5 percentage points in 2008 to 0.4 percent growth in 2008 (Chart 1. However. its share to nominal GDP decreased slightly from 9.3.9 percent in 2009 (2008: 1. insurance and real estate recorded a growth of 6. However. a drastic decline from its 45.2 Hotels and Restaurants The performance of this sector is directly associated Chart 1. Similarly. 1.9 percent during 2009.7 percent.000 tourists by the end of 2013.9 percent of nominal GDP.3. This sector constitutes 0.5.2 percent in 2009. 2006 this sector has tremendous potential for future 2005 expansion.3 Transport. Within this sector.

5 percent increase in Thai tourists (to 975 tourists). personal and recreational services constitute a marginal portion of overall GDP.404 % Change in arrivals 47.1 (17.5 11.0 29. constituting 20.8) * Includes both trekking only and trek-cultural combination.and social services sector to nominal GDP grew to 13 percent compared to 10.9) % Change in receipts 1 6. this sector recorded a growth of 1. Sources: Tourism Council of Bhutan.3 21.4 Tourism Bhutan experienced a 15 percent decline in tourist numbers (to 23. 1.6 13. Notably. making Thailand the top 4th source of tourists arrivals for Bhutan during 2009.076 Trekking * 613 2. 1) in millions of USD.587 4.199 2.480 Of which: Cultural 13.855 18.489 2. there was a considerable increase in Israeli tourists by 103.6 31.8 percent in 2009 (to 159 tourists).3 24.5 7.1 Contribution to Government revenue % Change in contribution 47.4 percent.3 10.3 29. with a corresponding decrease in the foreign exchange revenue collection by 17.2 percent in the previous year.094 27.9 percent (to USD 31.3 Selected Tourism Indicators: 2005-2009 Item 2005 2006 2007 2008 2009 Tourist Arrivals 13.5) 1 18.507 23.480) in 2009 from arrivals of 27. In 2009. Social.7 46. and Recreational Services Private social.3 27. as well as a 55.4 30.5 29.9 (19. which was significantly lower from 5.9 million) in 2009. The USA remains the single largest source market for Bhutan. 1. Government revenue includes royalty and 2% tax. However.626 17.4 percent.636 23.013 14.8 percent in 2008.8 31.8 38.437 21.8 11. followed by Japan at 13. this sector’s contribution to real GDP growth remains negligible.6 Private. and the United Kingdom at 8.4 of total arrivals during 2008.3. Table 1. .9 percent.344 21.636 in 2008.9 Gross receipts 48.0 (1.5 24. Time series data on tourist arrivals and revenues is presented in Table 5 with a detailed description of developments in the Bhutanese tourism sector presented in Annex IV.

2.

MONETARY AND FINANCIAL DEVELOPMENTS
Bhutan’s financial system continued to exhibit strong growth during the FY 2009/10. Broad money expanded by 30.1 percent largely as a result of expansion in quasi money while credit to the private sector grew by 38.6 percent during the review period. Notably, during the 2nd quarter of 2010, inflation was registered at 6.1 percent as compared to 2.9 percent during the same period last year. Higher inflation during the year is attributed to a rise in the prices of both food and non-food commodities included in the CPI basket. In order to maintain sustained external and financial sector growth and stability in the economy, the RMA continued to implement several policy measures during the year (Please refer to the subsequent discussions in this section of the report for details).

2.1.

Monetary Developments

Bhutan’s monetary sector during FY 2009/10 exhibited further expansion. The sector was driven mainly by significant growth in net foreign assets (NFA) on the assets side, and currency outside banks, demand deposits and time deposits on the liability side. Totaling Nu.41.8 billion at the end of the review year, broad money supply (M2) grew at a much higher rate of 30.1 percent during 2009/10 (2008/09: 24.6 percent). This reflected a considerable increase in demand deposits, currency in circulation and quasi money on the component side, and NFA on the counterpart side.
Chart 2.1 Money Growth (annual change)
38 30 22
%

14 6 -2 -10 2005/06 2006/07 2007/08 2008/09 2009/10 M2 M1 QM

For monetary analysis, the balance sheet data of financial institutions are classified within the framework of Monetary and Financial Statistics Manual 2008 (MFS 2008) published by the International Monetary Fund. Please note that the data classification and computation done by the Research and Statistics Department of the RMA is not directly comparable to those compiled and produced by the Financial Regulation and Supervision Department of the RMA.

Looking at Table 2.1, of the two major elements of M21 on the component side, M1 had a lower contribution at 22.7 percent against 27.7 percent in 2008/09, indicative of decreased growth in its constituents, demand
1

Narrow money (M1) = (1) currency outside the RGOB treasury, the RMA, and the vaults of depository institutions; (2) demand deposits; and (3) other checkable deposits, consisting primarily of negotiable order of withdrawal accounts at commercial banks. Bank reserves are not included in M1. M2 = M1 + Quasi Money (QM). M2 represents money and close substitutes for money. M2 is a broader classification of money and can be measured identically from the asset (Counterpart) and liability perspectives (Component) of the monetary sector. On the counterpart side, M2 = Net Foreign Assets (NFA) plus Net Domestic Credit (NDC) plus the Other Items Net (OINs), and from the component side, M2 = M1 plus QM.

deposits and currency in circulation. Constituents demand deposits grew at an annual growth of 24 percent compared to 28.7 percent, while that of currency in circulation grew at an annual growth of 18.6 percent compared to 24.7 percent in the previous year. The other element of quasi money, which includes time deposits of the public and foreign currency deposits of non-government entities, also witnessed a significant increase in its growth from 20.6 percent to 40 percent during the review year. Table 2.1 Selected Monetary Aggregates
2005/06 23,208.7 26.3 10,678.1 14.4 22505.0 37.2 8092.5 -5.0 -648.4 -151.0 7462.5 32.2 1837.8 14.9 7388.8 12.2 2614.9 13.5 8063.1 14.7 12530.6 38.5 2006/07 25,208.5 8.6 13,542.3 26.8 24881.3 10.6 9345.1 15.5 -2009.6 209.9 10111.7 35.5 1961.2 6.7 9017.8 22.0 3166.0 21.1 10376.3 28.7 11666.4 -6.9 Millions of Nu., End of period 2007/08 2008/09 2009/10 25,780.7 32,113.5 41,778.7 2.3 24.6 30.1 14,392.4 18,375.0 22,537.7 22.7 6.3 27.7 26365.6 6.0 12794.2 36.9 -2264.5 12.7 13890.4 37.4 1736.3 -11.5 13379.1 48.4 3640.8 15.0 10751.6 3.6 11388.3 -2.4 33074.0 25.4 15122.7 18.2 -4490.1 98.3 18216.0 31.1 1721.2 -0.9 16083.2 20.2 4541.8 24.7 13833.2 28.7 13739.8 20.6 35236.5 6.5 21811.1 44.2 -4047.2 3.7 25246.1 38.6 1937.7 12.6 15269.0 -5.1 5386.5 18.6 17151.2 24.0 19241.0 40.0

MONEY SUPPLY, M2 % change MONEY SUPPLY, M1 % change Counterparts 1. Foreign Assets (Net) % change 2. Domestic Credit % change Claims on Govt. (Net) % change Claims on Private Sector % change Others1) % change 3. Other Items (Net)2) % change Components +) 4. Currency Outside Banks % change 5. Demand Deposits3) % change 6. Quasi-Money4) % change

*) M2=1 plus 2 minus 3. -+) M2=4 plus 5 plus 6 and M1= 4 plus 5. -1) Claims on Government Corporations, Claims on Joint Corporations, and Claims on Non Monetary Financial Institutions. -2) Including Money Market Instruments (Treasury Bills). -3) Including Saving Deposits. -4) Time Deposits and Foreign Currency Deposits.

Meanwhile, on the counterpart side, NFA, which includes the net convertible currency plus net Rupee position of the monetary sector, recorded slower growth in 2009/10, increasing by 6.5 percent compared to 25.4 percent as of 2008/09. The monetary sector’s negative Rupee asset balance improved from INR (3.3) billion in 2008/09 to INR (3.1) billion in 2009/10, recording a decrease of (5.8) percent in 2009/10. On the other hand, the net

Chart 2.2 Growth in M2 and its Counterparts (annual change) 50 40 30
%

20 10 0

-10 -20 2005/06 2006/07 2007/08 2008/09 2009/10 NFA DC OIN M2

convertible currency assets increased by 5.4 percent (2008/09: 33.6 percent) to Nu.38.3 billion for the year ending 2009/10. Moreover, domestic credit, including credit to the RGOB, government corporations, individuals, private companies, and NBFIs, registered higher growth of 44.2 percent from 18.2 percent in the previous year. Similarly, credit to the private sector expanded by 38.6 percent as compared to 31.1 percent in the last fiscal year. 2.2. Review of Developments in Commercial Banking
Chart 2.3 Composition of Commercial Banks' Reserves (June 2010)
CRR 42% Cash 3% Treasury Bills 6% Other Deposits 49%

Performance in the banking sector remained progressive during 2009/10. Total assets of the commercial banks increased from Nu.33.4 billion in 2008/09 to Nu.45.4 billion in 2009/10, expanding by 36.2 percent in 2009/10 compared to 22.3 percent in the previous year. Much of the improvement can be attributed to growth in the banking sector’s liquid funds on the uses side and growth in deposits on the sources side. On the uses side, commercial banks’ reserves increased from Nu.11.7 billion in 2008/09 to Nu.15.5 billion during 2009/10, representing roughly 34 percent of their total assets. Of their total reserves, 42 percent were held as CRR, 3 percent as cash in hand, 6 percent as Government Treasury Bills, while the remaining 49 percent were held as other deposits. In addition to these reserves (excluding cash in hand), the banks held Nu.2.7 billion worth of foreign assets, denominated in Indian Rupees and convertible foreign currency.
Chart 2.5 Sector-wise Investment of Commercial Banks (June 2010)
Agriculture 1.9% Service &Tourism 16.6% Mfg18.1%

Chart 2.4 Growth in Deposit Liabilities of Commercial Banks
35 25
%

15 5 (5)

(15) 2006 2007 2008 Saving 2009 2010 Time

Current

Building &Construc tion 24.9%

Trade & commerce 14.1%

Transport, 6.4 %

Personal &Other Loans18%

Moreover, in line with growing domestic demand and economic activity in the country, credit to the private sector expanded to Nu.25.2 billion as of 2009/10 from Nu.18.2 billion in the last fiscal year.

Meanwhile, on the liability side, growth in total deposits (including foreign currency deposits) recorded higher growth at 32 percent in 2009/10, as compared to 25 percent in 2008/09. The growth in total deposits was mainly driven by the increase in current deposits (by 22.3 percent against 32.1 percent in 2007/08), saving deposits (by 26.3 percent against 24.1 percent in 2007/08), time deposits (by 42 percent against 21.2 percent in 2008/09), and foreign currency deposits (by 17.2 percent against 15 percent in 2008/09). Furthermore, the total loan portfolio of the commercial banks expanded by 20.4 percent to Nu.26.1 billion during 2009/10. Sector-wise distribution of credit indicated that the largest share of the credit portfolio continued to be allotted to the building and construction sector (24.9 percent), followed by manufacturing (18.1 percent), personal and other loans (18 percent), and service and tourism (16.6 percent), with the remainder allocated to other sectors. In overall, the growth of credit to the private sector of both banking and NBFIs sectors remained strong during the review fiscal year. Chart 2.6 presents the growth trend in selected loan sectors since 2005, revealing substantial expansion in recent years towards personal loans and manufacturing. In terms of FIs exposure to various loan portfolios (Table 2.2), NPLs ratio declined to 10.3 percent in June 2010 from 18.3 percent in the same period last year. As a percentage of total NPL, the overdraft/working capital of FIs witnessed the highest NPL of 26.5 percent in June 2010, followed by the housing sector at 24 percent, and service and tourism sector at 14 percent.
Chart 2.6 Growth in credit to the private sector & selected sub-sectors (June-end) 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 -10.0 -20.0 -30.0 -40.0 50.0 40.0 30.0 20.0 2005 2006 2007 2008 2009 2010 10.0 0.0 Pvt Sector Credit (right hand) Building & construction Trade & commerce Personal loans Manufacturing Agriculture Transport EDP & small business

% change

3 Small Business & Artisan Scheme 2.3.9 774.923.7 2.5% Trade 29.2 Personal 114.7% Building &Construc tion 30.0 Sector 2006 2007 88.2 2.7 Sector-wise Investment of Non-Bank FIS (June 2010) Service &Tourism 0.9 453.5 8.4 0.9% & Other review period.0 7. Total reserves 12.775.7 125.5 Loan Against Shares 3.4 4.1 726.438.2 763.757 million during 2008/09 to Nu.9 2.8 450. Mfg 9.6 244. the growth in domestic borrowings from the financial institutions grew substantially from Nu.5 1. This decline is attributed mainly due to the recategorization of BDFCL as a commercial bank in 2010. On the liability side.5 Trade & Commerce 94.7 316.4 12.4 Source: Financial institutions excluding NPPF.1 billion in June 2010.3 million in the 16.3 3.099.3 45.Table 2.1 184.2 424.0 382.2 289.2 105.6 Staff 0.6 2.752. from Nu.5.5 153.6 Agriculture/Animal Husbandry Manufacturing/Industry 166.6 13.6 107.7 Total Loans of FI 11. 99.7 billion for the same period last year.487.2 0.6 1.4 Housing 411.4 24.2 million) was held in the form of cash in hand.9 1.0 5.9 41.8 10.9 10. the NBFIs overall credit portfolio accounted for 75 percent of their total assets.2 138.1 EDP (Entrepreneurship Loan) 1.4 2009 205.9% represented roughly 15 percent of their total assets.5 percent to Nu. .5 2.1 4.256. as of June 2010.2 28.0 3.9 Transport (Heavy) 46.1 million) were in the form of bank balances and the remaining 0.1 0.298.6 0.8 6.3 1.0 14.4 14. Of these reserves. as compared to Nu.1 Service & Tourism 93.0 24.290.5 100.2 Non-Performing Loans of FIs by Sector of Investment Millions of Ngultrum % of total 2010 110.5 136.3 1.8 369.9 29.0 Total NPL Ratio 11.6.8 687.0 26.8 percent (Nu.1 0.1 billion in 2009/10.0 303.2. Meanwhile.1 13.2 Total NPL 1.018.2 0.1 216.9 696.0 1.791.4 1.7 18.0 Overdraft/Working Capital 235. the combined assets of the two NBFIs declined by 13.0 57.5 273.0 29.2. 2008 193.3 2.5% As for the overall reserves of the NBFIs.758.3 552.0 121.526. Transport Personal it increased to Nu.3 Transport (Light Vehicle) 31.3 18.5 799.104 Loans million last year. Review of Developments in NBFIs Chart 2.2 percent (Nu.1 69.4% During FY 2009/10.2 54.4 1.1 4.

6 504 6.3 Excess Liquidity and Sterilization by Instrument Jun-06 7604.During the year.9 2. Under prudential measures.9 percent).3 745. the use of the CRR instrument alone helped sterilize Nu. .3 37.8.0 543.1 Jun-07 7371.3 Jun-08 5180.3133 344. the RMA aimed to establish and promote a modest securities market to help and establish benchmark interest rates for FIs lending and borrowing. personal and other loans (12.5 Millions of Nu. The RMA continued to tighten monetary conditions by maintaining the CRR at 17 percent (the CRR was revised from 15 percent to 17 percent in August 2008).f December 14. provisioning requirements of sub-standard and doubtful loans of financial institutions were maintained at 30 percent and 60 percent respectively. Table 2. and holdings of interest bearing market instruments such as RMA Bills/ Government Treasury Bills.6 72.5 percent). the RMA resorted to several measures during the FY 2009/10 to safeguard the soundness of the financial sector. At the end of June 2010 (Table 2.2 Excess Liquidity CRR % of total RMA Bills/Govt.T. the RMA developed and increasingly relied on indirect instruments of monetary management. Excess liqudity is defined as the commercial banks' balances (reserves) maintained with the RMA in excess of their cash in hand.6 170.0 12. Further details and information on developments in the financial sector.1 1.Bills) thereafter.6 2862.e. Similarly.3 5256 6846. NB:(*) The issue of RMA Bill has been discontinued w. In particular.Bills* % of total Cash in Hand % of total Source: RMA and commercial banks. With the elimination of quantitative credit controls over the years. for the highest exposed sectors.3 percent of total liquidity). the RMA resorted to variations in reserve requirements.8 2.8 2889.2009 and has been replaced by Government Treasury Bills ( Govt. including the NPPF and RSEBL are presented in Annex II.8 3734.2 156.8 1000. A sector-wise break-down of the loan portfolio indicated that the building and construction sector constituted the highest share (30. regular sale of Treasury Bills.2 2.6 10.9 percent). the RMA continued to play an important role in monetary and credit management.4 84.6 165. 2. in light of global financial developments.1 414.7 8121. Through the issuance of the 91 days Treasury Bills.5 percent). Jun-09 Jun-10 5342. Monetary Policy Instruments To ensure the sustainability of the exchange rate arrangement and to cushion the external sector. transport (16.4. aimed primarily at liquidity management.1 billion (84.T.7 billion. the total loan portfolio of the NBFIs expanded by almost 43 percent to Nu. the mandatory cash reserve requirement (CRR).2 121. with the rest allocated to other sectors. a review of the performance of the Bhutanese financial sector for the year ending June 2010 is also presented in Annex VIII.2 8.3 39.9 98. Moreover.3. followed by trade and commerce (29.0 14. and the sale of foreign exchange to meet banks’ convertible currency requirements. the RMA continued to mop up the excess liquidity of the banking sector though the issuance of 91 days Treasury Bills. with the support from the Royal Government. Besides.4 6.3).

Similarly, the capital base of banks and NBFIs were maintained at Nu.300 million and Nu.100 million respectively.
Box 2.1 Monetary Policy Framework The Preamble of the RMA Act of Bhutan 2010 states that “Whereas, it is expedient to establish Royal Monetary Authority of Bhutan to function as the Central Bank to formulate and implement necessary monetary policy with a view to achieving and maintaining price stability; developing , regulating and supervising banking and financial systems, including payments system, to support macro-economic objectives of the Royal Government, bring in international best practices and to protect it against systemic risks and thereby enhance its credibility at the national and international levels”. Thus, in pursuant to the RMA Act of Bhutan 2010 (under Chapter II, Section 10), commencing 2011 onwards, the RMA shall formulate and publicly announce the annual Monetary Policy Statement for Bhutan in Parliament with the objective of maintaining price stability; and external and financial sector stability to facilitate sustained economic growth in the country. Generally, in most central banks, price stability is quantified, e.g., in the case of the European Central Bank, price stability is equivalent to a (year-to- year) rate of change of the CPI below or close to 2 percent, to be maintained over the medium term. The intermediate target for achieving and maintaining price stability in Bhutan is the one-to-one peg between the Indian Rupee and the Ngultrum. In light of the pegged exchange rate regime adopted by Bhutan, however the scope of Bhutan’s monetary policy is limited and confined to the support of the peg, including the following basic measures: a) Ensuring the sustainability of the exchange rate arrangement, i.e. always making available sufficient Rupee on demand for exchange with the Ngultrum for the payments in India and provision of at least 100 percent Ngultrum for the payments in India and provision of at least 100 percent reserve backing for all Ngultrum issued (elements of a Currency Board). b) Confidence-building measures for the Ngultrum (e.g., credible RMA and Government policies). c) Sterilizing any persistent growth in liquidity to forestall a possible build-up of inflationary pressures, a weakening of the balance of payments, and a contingent effect on the financial market. The following are the main supporting factors for the existing system: a) Close economic and financial relationships exist between India and Bhutan. b) There is a dual currency system, with the Ngultrum and the Rupee circulating freely side by side in Bhutan. The system can be described as an informal monetary (currency) union with India c) Inflation and interest rates in the two countries are closely related. d) The arrangement maintains confidence and ties Bhutan to the relatively stable monetary conditions in India. e) The peg has also clear benefits for trade with India, since there is no uncertainty about exchange rate developments between the two trading partners. On the basis of the above factors, the monetary policy decisions made in Bhutan are viewed as prudent and appropriate. Source: RMA.

Box 2.2 Overview of Monetary Policy Instruments Overview of the Cash Reserve Ratio (CRR) • • • The CRR, introduced in 1984, was set at 3 percent for all deposits with the BOBL. It was revised in 1994 to 15 percent for all deposit liabilities; cash in vaults being counted towards the CRR after the introduction of RMA discount bills and government bonds. With the conversion of the Unit Trust of Bhutan into Bhutan’s second commercial bank, BNBL, the CRR was adjusted in July 1997 to 15 percent for demand deposits only; cash in vaults being counted towards the CRR. In January 2000, the CRR was further adjusted to 10 percent for all deposits; cash in vaults not being counted towards the CRR. On July 1, 2002, in a move to sterilize additional excess liquidity from the banking system, the CRR was further revised to 20 percent on total deposit liabilities, while interest payable on the balance was also revised from 2 percent to 3 percent per annum. In order to provide adequate liquidity to meet credit growth and support investment and export demand in the economy, RMA revised the volume of CRR downward from 20 percent to 13 percent of total deposit liabilities with effect from March 1, 2004. The rate of interest payable on CRR balances has been revised from 3 percent to 1.5 percent per annum. With effect from September 2007, RMA tightened monetary conditions by raising the CRR from 13 percent to 15 percent and then to 17 percent in 2008, and discontinued the payment of interest on it.

• •

RMA Discount Bills and Treasury Bills • The RMA discount bills (maturity of 31 days) were introduced in December 1993 at the discount rate of 11 percent. From April 1994, the maturity period of the bills were extended to 91 days. Till October 29, 2001, the selling procedure was based on auctions and after that it was discontinued and tap sales were introduced. As a measure to absorb excess liquidity from the banking system and to stimulate the market interest rates, beginning August 2008, the RMA increased the discount rate on RMA Bills from 5.0 percent to 6.0 percent per annum. From December 2009, the Royal Government issued 91 days Treasury Bills (T-Bills) replacing the RMA bills. Further information on the T-Bills is included in Section 4 of the Economic Review. Source: RMA.

2.5.

Prices
Chart 2.8 Consumer Price Index year-on-year percentage change)
14 12 10 8 6 4 2 0

According to the NSB’s quarterly consumer price index, annual inflation in Bhutan accelerated to 6.1 percent during the second quarter of 2010 as compared to 2.9 percent during the same period last year. Consequently, the purchasing power of the Ngultrum decreased to 68 Chetrum from 73 Chetrum during the second quarter of 2009.

%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

As indicated in Chart 2.8 and Tables 2.4 and 2.5, higher inflation is attributed to a 2008 2009 2010 rise in the prices of both food and nonTotal Food Non-Food food items. Growth in the prices of food commodities was recorded slightly higher at 6.9 percent June 2010, against 6.7 percent during second quarter last year. However, growth in the prices of non-food items rose to 5.7 percent during the review period as compared to 1.1 percent during the same period last year. Under food items, which constitute 31.7 percent of the overall weights assigned in the commodity basket, the highest growth was recorded for bottled sugar, jam, etc., at 51.6 percent, followed by the price of fish at 16.9 percent and fruits at 14.2 percent. Meanwhile, the prices of meat decreased considerably to almost zero percent from 24.6 percent last year, and that of oils and fats rose to 7.6 percent and milk, cheese and eggs decreased to 3.3 percent during the second quarter of 2010. On the other hand, the prices of vegetables accelerated significantly to 13.2 percent for the quarter ending June 2010, from a negative growth of 1.6 percent during the same quarter last year. On the other hand, in the case of non-food items, the highest growth in prices was recorded for house rent with 15.1 percent, followed by clothing with 7.3 percent during the review period. However, narcotics and tobacco recorded negative growths of 0.6 percent and 1.5 percent, respectively as of the second quarter of 2010. The prices of electricity, gas and other fuels declined to 2.5 percent, that of restaurants and hotels grew by 4.7 percent (Q2 2009: 0.6 percent), and the prices of furnishings, household equipment and routine household maintenance grew by 6.6 percent against a negative growth of 1.2 percent during the same period in 2009. As for other non-food items, the price of recreation and culture was registered considerable low at almost zero percent against 1.7 percent last year, followed by health at negative 2.6 percent (Q2 2009: 3.9 percent), and communication at negative 3.7 percent against a negative growth of 1.2 percent last year.

Q2

Table 2.4 CPI Major Component Indicators
Weight % Consumer Price Index (Q3 2003=100) Of which Food & non-alcoholic beverages Alcoholic beverages,tobacco & narcotics Clothing & footwear Housing,water,electricity,gas & other fuels Furnishing,household equipment & routine household maintenance Health Transport Communications Recreation & culture Education Restaurants & hotels Miscellaneous goods & services Source: National Statistics Bureau. 29.4 2.2 10.5 25.7 5.7 2.9 7.1 4.1 2.6 4.0 3.0 2.7 6.7 7.0 0.4 1.5 -1.2 3.9 3.0 -1.2 1.7 0.0 0.6 1.1 7.5 -0.3 2.7 11.7 6.6 -2.6 2.7 -3.7 0.0 0.0 4.7 -0.2 100.0 Q2 2009 3.0 Q2 2010 6.1

Table 2.5 Selected CPI Sub-Component Indicators
Weight % Consumer Price Index (Q3 2003=100) Food Bread & cereals Meat Fish Milk,cheese & eggs Oils & fats Fruits Vegetables Sugar,jam etc. Other food products Non-alcoholic beverages Alcoholic beverages Tobacco Narcotics,ND (not defined) Clothing House rent Electricity, gas & other fuels Fuels & lubricants for personal transport equipment Education Personal care Source: National Statistics Bureau. 71.3 27.7 7.9 3.3 1.0 5.2 3.4 1.4 4.1 0.6 0.9 1.7 1.2 0.3 0.7 7.9 18.8 6.0 3.2 4.0 2.7 Q2 2009 3.0 6.7 7.0 24.6 8.0 8.5 0.2 2.3 -1.6 -3.7 5.0 5.3 1.0 12.5 12.7 -1.2 0.2 5.4 -1.4 0.0 1.1 Q2 2010 6.1 7.8 7.7 0.0 16.9 3.3 7.6 14.2 13.2 51.6 1.3 0.3 0.5 -1.5 -0.6 7.3 15.1 2.5 5.8 0.0 -0.2

This is to some extent offset by large debt service obligations related to existing loan portfolios. driven by a tremendous growth in merchandise import levels from both India and other countries. Among other efforts to increase the scope and quality of BOP data.65 per US Dollar and in tandem with the Indian Rupee.46.1 million as at the end of June 2010. Steady investor sentiments continue to ensure modest growth in FDI-related flows and considerable lending inflows for Bhutan. Aggregated merchandise trade data is sourced from the Department of Revenue and Customs (DRC) on a half-yearly basis which is supplemented by detailed composition of trade on a calendar year basis. BOP data published in this report will be treated as final BOP statistics of Bhutan up till the fiscal year 2008/09. both convertible currency. Bhutan’s balance of payments (BOP) statistics are compiled and published on an annual. was positive on account of adjusting current transfer receipts and substantial net inflows in the capital and financial account.4. which is adequate to finance 12. A sustained and large trade deficit was underpinned this year by a significant growth in merchandise imports both from India and from other countries. mechanical equipment and appliances. . the Ngultrum averaged Nu. As of the FY 2008/09. Bhutan’s international reserves grew by Nu. several methodological revisions were implemented towards the compilation and estimation of BOP statistics in line with international best practices. as well as base metal and base metal products. and Rupee.3 months of imports and covers 103.3 percent of total debt outstanding as of the same period. In exchange rate developments. In particular.3. Given the special geo-political ties as well as the volume of trade with India. This data is adjusted on the basis of other surveys.4 billion to an equivalent of USD 868. For all purposes. In the financial account.6 percent against the US Dollar as of June 2010 from the June 2009 average. appreciated by 2. particularly the State Bank of India overdraft facility from India. fiscal year (July-June) basis. Despite substantial current transfer receipts. latest year data (2009/10) are provisional (p) and will be revised in subsequent issues of RMA’s publications. A study of commodity-wise imports reveals elevated growth for the import of machinery. and travel-related expenditures on education and private travel incurred by Bhutanese in India.1 Overall Balance of Payments Bhutan’s external position continued to improve during the FY 2009/10. As is practice. capital transfers recorded a substantial increase during the year due to larger inflows associated with capital grants received from the Government of India. During the year. The nation’s overall balance of payments though lower than the previous year. this includes a revision of estimates made to capture data on informal trade with India. deterioration in both the services and income accounts contributed to a larger current account deficit. Bhutan recorded a huge trade deficit that grew to 22. EXTERNAL SECTOR 3. BOP statistics are compiled separately for India and countries other than India (COTI).8 percent of GDP.

2) 32.1 2008/09 - Source: Research and Statistics Department.357.562.704.8) 28.5 6.0 6.3 4.9 48.754.015.730.220.7 (948.026.1 7. was driven largely by a substantial trade deficit and by slow growth in the services and invisibles accounts.205.065.4 (14.2 Current Account Nu.7 (2.3 percent of GDP (1.7) 39.4) 761. The considerable widening of the trade deficit was underpinned by sluggish growth in commodity exports coupled with a significant increase in overall merchandise import levels.3 37.0 1.749.2 1.4 (903.6 2. net (RGOB loans) Other loans.578.139.6 10.719. RMA.3 (1.657.2) 3.0 Balance on Goods and Services 27.414.4) 2.953.0 2009/10 (p) Net + Net (Millions of Ngultrum) 28.694.3 5.2) 5.4) 3.607.8 1.3 (5. Millions Chart 3.5 (1.700.1 Balance of Payments Item + Goods 24.782.4) 25.537.2 710.8 4.252.762.215.5 Services 2. Millions 50000 40000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 5000 30000 20000 0 2007/08 -5000 2008/09 2009/10 (p) 10000 0 -10000 2007/08 2008/09 2009/10 (p) -10000 Trade Balance Current Account Balance Overall Balance Capital & Financial Account Balance -20000 Merchandise Exports Merchandise Imports Balance on Services & Income Current Account Balance Grant Inflows (right hand) Bhutan’s current account deficit which grew more than eight-fold during 2009/10 to Nu.401.8. Current Account Chart 3.3) 8.603.225.0 (13.851.322.1 Overall BOP 10000 Nu.016.5 Income Current Transfers Current Account Balance Capital Transfers Foreign Direct Investment Foreign aid.8 4. .Table 3.5 534.583.049.101.7 3.938.980.2 547. (p) = provisional estimates.193.8 39.3 1.6 (1.8 billion equivalent to 14.012.0 (4.653.413.4 868.6 7.401.1 43.414. net (commercial) Capital and Financial Account Balance Net Errors and Ommissions Overall Balance Gross international reserves (USD millions) 1.8 (8.560.9) 3.8 772.8 36.7 percent in 2008/09).340.

9 3. In particular.6 2.0 7.1 4.3 4.973.3).0 40.1 590. respectively.9 percent of GDP or Nu.2 percent of overall exports.451.9 461. This was attributed to a slight expansion in merchandise exports both to India and COTI that was more than offset by a 35.032.4 783.7 2.2 618. Similarly.7 percent surge in commodity imports from both countries. Kurichhu and Tala plants to India (Nu.175.016.0 -20.8 billion as of 2009.496.866.Trade Account Bhutan’s trade deficit tripled during the fiscal year to Nu. remains Bhutan’s top merchandise export constituting 39.1 888.0 60.061.0 2.1 percent to Nu. headgear etc. decreasing by 6.097.3 5.8 percent of GDP (2008/09: 7. growing demand by the domestic industrial sector has reduced surplus power available for export. .9 billion or 22.8 308.1.8 2006 2.535.4 percent of all agricultural exports in 2009.536.788.4 10.659.5 262.519.3 Source: Department of Revenue and Customs. the sale of hydropower from the Chhukha.112.3 0. with close to zero-value exports in 2009. Meanwhile.6 895.1 214.3 2008 1. Magnetic discs 1. which accounted for 18.3 billion).5 10. of which Products of chemical & allied industries Plastic & rubber products Textiles. while hydro-power production levels remain consistent.0 2009 20. Table 3. This was led mainly by a decline in the export of processed food and beverages. Chart 3.9 4.1 1.2 294.7 6.9 285.1 485. Further information on developments in Bhutan’s power sector is presented in Annex V.072.110.3 11. the share of agricultural based exports to total exports has gradually declined over the years and dropped further to 7.4 percent). footwear.134.0 indicates a marginal value compared to (-).3 1.0 5.982.2 percent. these developments were to some extent mitigated by the growth of mineral and mineral based as well as other manufactured exports.1 298.10 billion for the year 2009/10).4.5 percent (2008: 8.3 8.4 744.9 3.3 Export Performance 150 100 50 0 -50 -100 Total exports (right hand) Agricultural products Hydro-power Minerals and related products Manufactured items 2005 2006 2007 2008 % change 100.0 80. exports of palm oil have experienced sharp declines in the past 2 years.5 6.4 3. Note: A figure denoted by 0.6 8.0 787.0 0.4 546. of which Processed food & beverages Hydro-power Minerals & mineral based products.439.343. indicating no value for that particular item.251.5 1.2 329.9 2. Nevertheless. of which Base metals and related articles Manufactured Items.7 2007 3. which in turn grew by 20. Weak export performance by hydropower and agro-based exports contributed to the marginal 3 percent increase in gross commodity exports up from its 2 percent growth in 2008/09 (Chart 3.9 10.0 2009 1.4 67.2 Gross Merchandise Exports Millions of Ngultrum 2005 Agricultural based products.626.13.904.720.0 In the non-power export segment.051.1 619.566.057.3 percent and 102.759.034.4 5.

20. based. growing to Nu.0 4000. export of base metal and related articles.401. mineral fuels. respectively.5 Composition of Exports. Besides the latter.8. 15.2% Hydropower. sulphur. slag and ash. other mineral and mineral-based commodity exports from Bhutan include salt.Chart 3.386.6 percent during 2009. and asparagus. earths and stone.9 million.8% Minerals & mineral based products.8% Hydropower.4 Composition of Exports. of which Live animals. by 23.7% Mfg goods. plastering materials. 31. 7. In 2009. 32.0 0. and pomegranates for Indian and Bangladeshi markets. potatoes. animal products Vegetable products Animal or vegetable fats or oils Processed foods and beverages Growth in minerals and mineral-based commodity exports has been sustained over the years.10 billion in 2009. but also contribute towards improving selfsufficiency levels within the nation. Chart 3. 2004 Agrobased.0 Total India COTI Total India COTI Total India COTI 2007 2008 2009 Agro-based commodity exports.1 percent from 2008 (Nu.0 1000. besides mandarin oranges. 2009 AgroMfg goods. and bituminous substances.5% 8. Compared to the previous year when copper exports were adversely affected by volatile global prices. will be instrumental in not only boosting agro-based industries in the country and export performance.6% Chart 3. lime and cement. 99 percent of all base metal and articles of base metal are exported to India. walnut. Bhutan’s single largest agro-exports were potatoes and oranges. . with export values of Nu.6 Bhutan Agro-Based Commodity Exports 6000. and Nu.4% Minerals & mineral based products. citrus. including passion fruit. Notably.8 million. mineral oils. grew considerably by 27.0 5000. which traditionally account for about 70 percent of Bhutan’s mineral-based merchandise exports.0 2000. 42% It is hoped that the Royal Government’s recent incentive packages through the FDI and Economic Development Policies. 41. incentives are being targeted at FDI in cash-crops.1 billion) and contributing 41. ores.0 3000.8 percent of total exports in 2009 (2008: 36 percent).

Figures for the latter had dropped to almost nil values in 2008.914. A list of top 20 non-power commodity exports and imports are provided in Tables 3.2 1.6 152. smart cards) Dolomite Gypsum (anhydrite.5 0. plasters) Potatoes (seeds & other) Oranges Semi finished products of iron & non alloy steel Ingots (iron & non-alloy steel) Particle & similar board Plastics (plates.5 1.0 0.0 0. aluminous.803.619.3 2.9 54.1 0.973.6 0.2 156.5 4.1 0.0 3.3 110.3 7.7 619.6.7 112.8 1. and broadly reflects higher growth in the import of capital goods by 18.6 COTI 49.3 Commodity Export Performance: Base Metal and Related Articles Millions of Ngultrum Base Metal Exports and Articles of Base Metals Iron and Steel Articles of iron and steel Copper and articles thereof Aluminium and articles thereof Tin and articles thereof Other base metals and articles thereof Total Source: Department of Revenue and Customs.3 1. supersulphate) Carbides (calcium.3 977.1 138.2 3.3 0.8 971.3 million.2 619. sheets.3 0. profiles (of plastics) Mineral water & areated.0 2.4 0.2 12.4 Top 20 Non-Power Commodity Exports 2009 Item Ferro-alloys Cement (Portland.9 1.7 0.369.8 319.1 percent in 2009 (2008: 28.8 5.0 49. tapes.5 268.017.7 2.4 percent of all capital .4 272.8 246.7 93. Table 3.0 18.1 1.1 122.4 0. solid-state non volatile storage devices. this sector’s performance is relatively lower compared to pre-2008 levels.4 350.1 368. others) Copper wire Bars & rods (hot-rolled. waste and scrap Apples Total exports (including electricity & others) 2008 % Value % Value (Millions of Share (Millions of Share of total Nu.7 4. sweetened waters Manganese & articles thereof.7 161.1 3.7 130.813.250. sticks.7 2.2 818.9 5.004 2.9 60.4 1.8 0.1 22.6 0.5 386.5 1.2 338.5 401.3 5.3 5. smart cards and other media for recording).4 and 3.206. tapes. Overall.0 0. but have re-surfaced in 2009 with exports valued at Nu. their contribution to overall exports grew to 8.3 Gross imports (as reported in customs records) increased by 35. of iron or nonalloy steel) Recorded or Unrecorded media (discs.6 32.6 501.9 507. with a recent boost in exports of chemical and allied industries. largely due to the 2005-2007 unusual spurt in magnetic discs and unrecorded media exports abroad (discs. slag.1 1.5 1.8 0.4 151.2 61.7 percent during 2009/10 (2008/09: 7 percent). Major capital import components include machinery and mechanical/electrical appliances (which constitute 65.6 323.6 0.7 0.2 464.7 1.9 119.6 42. incl.5 0.7 percent during 2009 (Table 3. particularly calcium and carbides.9 0.012.2 As for manufactured merchandise.3 23.9 810. silicon.0 568. 2008 India 3.590.8 133.8 620.9 COTI 284.) 4.4 0.4 percent).0 0.3 0.0 284.5 2.6 2. film etc) Limestone & other calcareous stone Fruit & vegetable juices Monofilament rods.7 4.9 1.2).6 1.4 1.1 1.0 0.6 875.425.4 2009 India 5.Table 3.4 2.) of total Nu.7 0.0 852.

2 31. fruits. and animal products constitute 12.7 18.5 0. Meanwhile.7 2007 12. These imports expanded in 2009 by 6.1 10.9 30.9 percent.1 (8. other crops.3 105.5. of which Mineral-based products Base metals and related articles Capital goods.8 14.6). .2 8.5 Gross Merchandise Imports % change Intermediate goods. The first informal imports survey was conducted by the RMA in 2006 in Phuentsholing.4 (2.9) 28.4 17.8) 17.4 percent. of which Machinery/mechanical equipment Transport equipment and parts Consumption goods. these surveys are necessary to improve current estimates on informal imports in Bhutan’s BOP with India (and to reduce errors and omissions in BOP reporting).4 25.0 (6.2 20. informal imports are estimated at around Nu.8 percent. despite the 20 percent fall in the import of processed foods and beverages. 14.5 percent of all consumer-related imports. which account for 20.6) 13. the top 20 imports for 2009 (Table 3. as well as the import of transportation equipment (accounting for another 30. of which Processed Foods and beverages Products of chemicals and allied industries Vegetables. In line with investment and constructionrelated activity in the country.1 2009 7.6 2008 11. cereals.5 (20.2 billion. and 12.1 billion for the FY 2009/10. respectively of total consumption imports. including mineral fuels.6 percent.8 2.5 (38.2 (9. still largely feature specific intermediate commodities.5 percent. 16.6 16.0 18.5 (7.imports for 2009). followed by capital imports to the tune of 31.1) (7.5) 27.4 18.9) 9. accounted for 25.3 percent.8 7.8 Consumption related commodity imports grew slightly by 1. the RMA carried out a survey in Phuentsholing (the previous one was conducted in Samdrup Jongkhar in September 2009). respectively.5 10.0 13. The import of motor vehicles totaling Nu.0) 24.2 15. As of the latest figures. seeds Live animals and animal products Source: Department of Revenue and Customs.6 percent of total capital imports for the same period). commodity import values recorded in customs data are adjusted for informal commodity imports estimated through informal trade surveys carried out at major commercial towns along the border with India. intermediate commodity imports continued to grow in 2009. Bhutan’s major imports of chemicals and food related imports of vegetables. Table 3.4) (8.3 52.0 8. and 25.8 percent.0 13.3 59. oils and articles of base metals.5 percent during 2009.2) (34.0) 6.4 percent of capital imports during 2009 (Table 3.7). largely used in the construction and manufacturing sectors.8 percent. 2005 26.6 (80. expanding by 7.7 2006 16.1 26.9 1.1 14.4 12.0 29. Given the nature of the porous border between the two countries.0 24. Of significance.0 11. In line with efforts to improve estimation methods for informal merchandise imports from India.4 13. and dominating overall imports with a share of 38.5 percent.9) 9.

3 256.9 735.9 13.2 4.495.3 362.807.9 1.265.) of total Nu.6 1.8 522.198.9 43. mobile workshops.4 COTI 1. 2) Includes crane lorries.8 0. compacting & boring Towers & lattice masts (of iron or steel) Motor vehicles (cylinder capacity not exceeding 1000 CC) Corrugated iron/non-alloy steel sheets Petroleum bitumen Machine for reception.8 724.0 1. front-end shovel loaders.8 14. briquettes & similar solid fuels of coal Machinary for moving.009.) of total 1.8 239.5 573.9 56.3 663.6 7.2 43.4 513.0 69.8 2. docks.2 112.029.2 1.> 2.9 25.4 2. Table 3.4 325.6 223.522.4 1.Table 3.500 cc) Motorcycles (including mopeds) 50 cc . 2009 India COTI 1.1 4.1 0.194.0 Source: Department of Revenue and Customs.4 681. concrete mixers.5 1.9 1.5 179.1 1.4 1. scraping.4 294. maruti alto.9 2. of which 1) Passenger Vehicles Motor vehicles (for 10 persons or more) Motor vehicles for passenger transport (< 1000 cc . tucson.7 13.9 1.3 2.6 Overview of Motor Vehicle Imports.2 69.6 307.0 525.2 23.2 431.5 233.1 0. tinned iron or steel etc) Coke & semi-coke of coal Coal.5 109.7 Top 20 Commodity Imports 2008 2009 Value % Value % (Millions of Share (Millions of Share Nu. road sweepers.2 40.9 1.500 cc 2) Heavy Duty Motor Vehicles Tractors Vehicles for the transport of goods 2 Special purpose vehicles Work trucks 3 1 Total 2.0 1. 2007 – 2009 2007 Total Import of Motor Vehicles.910.6 1.0 411.9 678.1 Total 2.697.7 997.4 3.2 37.9 593. grading.6 1.8 764.0 0.7 480.1 944.8 Item High speed diesel Ferrous products (by direct reduction of iron ore ) Excavators.2 1.2 17.9 363.1 2.7 2. airports.0 94.2 434.5 2008 India 1.1 381.0 1.0 558.8 248.8 863.7 7.0 2.6 1. Includes those for lifting/handling equipment.9 792.7 253.3 Millions of Nu.0 1.0 33.conversion & transmission of image. spraying lorries.1 1. used in warehouses.7 904.7 0.1 1.6 25.1 21. switching & routing ) Milk powder Soyabean oil (crude & other ) Total imports (including remaining items) Source: Department of Revenue and Customs.1 2.4 718.8 693. tamping.0 279. short distance transport of goods etc. rexton.9 2.1 3.5 15.2 1. levelling.107.0 1.9 430.1 0.2 367. landcruisers etc.1 250.9 33.3 2.6 694. airports etc.704.0 618.8 15.0 721. 1) Most passenger cars e.8 279.8 703.2 270. data etc (incl.071.4 0.1 0. etc.g. hilux. mobile drilling vehicles.4 269.4 281. other rollers & dozers Motor spirit (gasolene ) including aviation spirit (petrol ) Rice Dumpers & motor vehicles for goods transport Copper wire Wood charcoal Motor vehicles (cylinder range: 1000 CC to 1500 CC ) Ferrous waste & scrap (cast iron.0 1. fire fighting vehicles.7 51.1 2. .7 0.0 1.7 3. excavating.270.0 327.3 1.2 1.5 21.3 2.2 618.4 269.1 0.0 618.5 280.4 1.5 273.9 389.2 310.4 17. santa fe.545. Does not include the import of vehicle parts.0 1.1 134. would fall under this category.4 0.8 1.0 288.2 573. 3) For use in factories.2 252.2 2.

1 2. gypsum and limestone).9 1.9 1.8 4.7 percent in 2009 (Chart 3.3 0. heavy machinery equipment and parts.5 percent of Bhutan’s commodity exports as of 2009 (Chart 3. cardamom.8 Direction of Commodity Imports 100% 90% 80% 70% 2. Bhutan recorded a balance of trade deficit with Nepal of Nu.5 3. As of March 2010.9 million.2 percent (transportation and communications equipment and parts. electrical appliances/equipment. apples.8).Due to the porous border and close financial and trade linkages with India.1 3. China at 1.9 percent (processed foods and beverages. synthetic yarn. electronics and mechanical appliances). Chart 3. and other mechanical/ electrical appliances).2 77.01 0. and Hong Kong with 2. polymers and polythene.2 2. home furnishings).4 13. Japan with 2. and mineral products.8 percent share. steel. both countries have agreed to work towards finalizing a Preferential Trade Agreement that will benefit both nations in the form of reduced export duties.7 Exports of Goods by Destination 100% 90% 80% 70% 93. commemorative coins.6 1. coal. India is followed by Bangladesh with 3.4 0.5 0. In 2009.9 percent (textiles and footwear.9 95.1 India is also Bhutan’s largest source of commodity imports at 77.9 Share in % 60% 50% 40% 30% 20% 10% 0% 4. Within the region.8 percent (telecommunications equipment and heavy duty earth moving equipment/ vehicles).8 0.7 2.7 73. Share in % 60% 50% 40% 30% 20% 10% 0% Bangladesh Hongkong Nepal India Japan 2008 2009 Chart 3.8 0.5 0. importing mostly cordyceps and furniture from Bhutan. and India accounts for 93.1 Bangladesh Hongkong Nepal India Japan 2008 2009 Others Others . Exports to Nepal include largely gypsum. Nepal’s place in Bhutan’s export destinations over the years has remained steady over the years. transportation and communication equipment and parts. and Sweden at 1. Trade diversification has been minimal over the years. with its share in Bhutan’s overall commodity exports at less than 1 percent. articles of plastic and rubber. Following India in the top five list are Singapore with 2. processed foods. iron bars.7). India remains Bhutan primary destination for both commodity exports and imports. fruit juices and processed foods and beverages.284. cement and cordyceps from Bhutan. including dolomite.2 percent (oranges.7 12.

9 0.6 453.9 489.5 0.4 491. Bhutan imported essential food items totaling Nu.3 414.3 3.8 327.7 180.9 -2031.1 485. in addition to natural constraints associated with terrain and wildlife.9 321.8 355.0 0.6 8.0 2307.9 408.8 0.4 693.8 328.0 966.2 0.0 0.2 106.6 0.3 465.0 7.5 3.5 0.6 billion as of 2009.1. tubers Edible fruits & nuts Edible Oils Sugar 2007 India 105. World Food Day in October 2010 highlighted that 13.2 2.0 0.9 0.8 -2083.9 57.1 36.1 1875.0 0. what concerns policymakers is the fact that these developments take place against a backdrop of ever-increasing food demand in the country that is projected to double by 2030 (Ministry of Agriculture). of which Milk.1 124.1 1.2 0.0 0.3 0.6 38.4 412.2 0.1 8.0 0.6 196.0 999.6 0.0 544.0 607.1 0. roots.0 0.6 0.4 42.0 464.4 41.0 0. barley.8. butter & cheese Eggs Meat and related products Cereals.3 12.2 0.0 825.0 0.6 672.1 0.3 721.3 2.8 140.7 234.4 1912. Numerous reasons have been attributed to this phenomenon.5 2008 COTI Total India -1319.3 0.2 15.7 69. due to its vast socio-economic implications for the nation.2 0.0 805.9 410.9 480. butter & cheese Eggs Meat and related products Cereals. 2009 COTI Total India COTI -528.0 2. Furthermore. according to the Bhutan Living Standard Survey of the NSB. 1) Meat and related products includes all live animals and meat including fish.1 320.0 0. millet etc.3 0.5 4.4 36.2 363.6 1547.1 78.8 percent of Bhutanese households.8 913.8 694. 26.1 672.0 157.9 2612.4 0.8 410.5 -1629. with the escalation in food prices across the border. during 2009. and excluding eggs.1 253.0 129.0 0. tubers Edible fruits & nuts Edible Oils Sugar Import of Selected Food Items.2 3220.9 Millions of Nu.1 Source: Department of Revenue and Customs. of which Rice Vegetables.2 2103.3 0.1 544.2 1875.8 365. buckwheat.7 119.0 3550.4 34.1 30.8 17.1 173. including restricted access to land and markets.8 1997.0 471.9 2336.0 528.0 8.7 0. with an overall food trade deficit totaling Nu.1 485. milk.Box 3.4 0.3 -1502. 2) Cereals include wheat. maize.0 8.3 7.9 0.8 177. Bhutan continues to import large amounts of food items to meet domestic demand.0 7.0 0.6 billion. cheese and honey.7 2.0 0.2 2629.0 0.0 1189.0 150. of which Milk.1 721.7 4.0 36.9 0.0 0.0 0.1 1.8 Bhutan’s Food Trade Balance: Selected Food Commodities Total Selected Food Defict/Surplu -1214.6 138. of which Rice Vegetables.2.2 251.8 182.1 323.0 8.5 490. food sufficiency looms as a major issue of concern to policy makers. .4 825.0 1. largely rural.6 3.0 0.0 0.4 12.6 3.2 27.7 755.5 1165. roots. Moreover.2 384.8 8.1 111.4 Export of Selected Food Items.2 111.4 7.8 6.8 0.1 28.9 0.0 0.9 0.2 Bhutan’s Food Trade Balance While Bhutan remains an agrarian economy with over 65 percent of labor force engaged in farming.7 173. do not have sufficient access to food for 1 or more months in a year. rice.1 0.0 0.2 0.6 605.124 kilocalories per person per day.3 0.6 percent of Bhutanese households fall short of the minimum required daily energy intake of 2.1 120.0 0.1 8.1 7.6 8.3 4.2 26.6 11.3 0.0 384.6 1553. rural-urban migration effects on a shrinking farming workforce.7 147. Looking at Table 3. However.2 233.5 407.0 0. Table 3.

6 8851. Income and Current Transfer Accounts (Millions of Nu.5 percent.4 6575.8.8 Deterioration in the services account was driven mostly by reduced inward travel. underpinned by a 46.6 2700.5 928.3 -5.4 percent to Nu. the performance of the services industry deteriorated as recorded in the widening of its overall deficit by 12.6 -1188.1 -1574.3 -1926.5 928.3 -4.0 6575.4 448.5 -1615. and a .1 -50.1 Remittances -1855.7 194.9 -1015.4 -1.5 8909.9 Invisibles Services Account of which -1562.4 Government transactions 34.9 Transportation 214.4 94.8 119.0 -2226.6 -1704.9 -2.2.2 -2097.9 -1772. RMA.7 11.9 -843.1 percent of all inward travel receipts while the remaining 99.9 2009/10 (p) Net -9197. while travel outflows to both India and other countries grew by 22.1 1259.5 Travel -1135.3 -1115.6 10414.0 % of GDP -3. net personal travel receipts fell considerably by 70. that can be highly attributed to a 24.0 17.6 percent was supplemented by an increase in budgetary grant inflows by 35.5 -3414.0 -1749.7 Debt service -1769.7 percent of GDP.9 -114.1 Budgetary Grants 5935.5 percent of all outward travel flows were channeled for personal travel.6 -138.0 -232.4 -6. Bhutan’s invisibles account improved during 2009/10.5 -6.0 -5. business travel transactions constituted 0.3 percent drop in net receipts from COTI.213.0 1313.64.7 Other services -676. including health-related.Services.6 -1562.3 million. On the other hand. Meanwhile.8 14.9 percent increase in the current transfer surplus to Nu. 85.3 -3.8 145.2 -2653. COTI travel inflows dominate the travel account at 90.2 1862.4 percent in 2009/10 to Nu. A slight decrease in net remittance outflows by 8.7 5183.8 148.3 Net + 3373. 6026.0 -1317.9 percent were accounted for by personal inward travel from both India and COTI.7 14381.5 83.5 -195.0 -989.5 14.1 billion or 1.3 million in 2009/10.7 -3603.9 -2097.9 688. Table 3.3 percent of GDP to Nu. education and other private travel (general inward and outward tourism).5 191.4 Source: Research and Statistics Department.7 billion.3 Income Account of which -1310.7 -1798.8 Current Transfers Account of which 4714.2 -905.4 761.3 5.7 Interest on deposits 977. During the year.6 -218.9 percent share of India travel outflows in total outward travel flows.4 412.4 + 11443.4 2008/09 -8069.7 -1834.6 -1509.9 billion.1 688.2 -1.4 percent to Nu.9 percent of total inflows.0 -1441. Under travel.4 -3.8 percent to Nu.9 -1537.1. the income deficit rose to 4.6 3205.2 72.9 Investment income.6 % of GDP -2.448.1 7730.2 4.9 -227.9 billion.7 874.0 1.4 1007.9 Services.1 -1589.1 8909.1. compared to 62.3 -4220.3 146. COTI travel inflows dropped by 9. On the other hand.7 billion.6 928.9 893.3 million in the previous year to a deficit of Nu.3 -1496.1 2022. of which -846.1 1012. Income and Current Transfer Account Overall.8 % of GDP 9.9 Compensation of employees -463.2 -1798.6 1.3 -1687.4 688.2 1102.9 -64.4 Other transfers (INGO receipts 634.2 -2762. which resulted in a huge turnaround from an overall travel net surplus of Nu. For the year under review.) 2007/08 Net 1841.0 -53.0 -903.

2 percent of GDP). with the deficit expanding by 51. 2009/10 (p) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Outflows Inflows Transportation Government services Other business services Insurance/ financial Construction & Installation Communication Travel Chart 3.7 million). convertible currency paying tourists visiting Bhutan as recorded by the daily visa fee and tour operators’ revenues. other tourism. 69.9 Composition of the Services Account .3 percent of GDP (2008/09: 3.20. Indian tourists. the deficit on other business services (information technology. and health-related expenditures amounting to Nu.1 percent of overall services imports. Payments abroad on other business services accounted for 15.5 percent was incurred on educationrelated expenditures (Nu.132.9 percent of all personal travel outflows were directed to India.1. the import of construction and installation-related services (entirely from India) fell slightly by 2. 97.1. These services constitute 24. and were imported for the development and maintenance of the Chhukha and Punatsangchhu I hydropower projects. recorded tourist revenues from COTI totaled Nu. followed by 34.4 percent on other travel (Nu. Chart 3.948.1 billion as of the end of the fiscal year. Additionally. Bhutan’s income account deteriorated further in 2009/10.7 percent to Nu.e. interest earned on deposits held abroad. Besides travel-related transactions.. expanded by 49. education & other Health Education Other (general tourism) During the year.3 percent to Nu.6 percent increase in other travel net outflows (Personal travel covers both inward and outward tourism for education and health. and includes estimates on outward tourism such as pilgrimage travel and visits to COTI under the foreign exchange Annual Travel Scheme). Meanwhile. Bhutan’s expenditure on personal travel abroad expanded by 27.6 billion (2008/09: Nu.1 million.4 percent over the previous year.3 billion). financial and insurance. 2009/10 (p) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Outflows Inflows Note: Personal travel = health.567.3 million).3 percent of which were sourced from countries other than India.7 billion or 4.10 Composition of theTravel Account .7 percent to Nu. Under investment income. Details on tourist arrivals and revenues are provided in Section 1 and Annex IV. communications and miscellaneous business services) in line with overall economic activity.2.1.1 percent to Nu. fell by 25.9 million as of 2009/10.4 percent of total services imports.7 billion for the year 2009/10. Similarly. i. of which 57.637. a decrease of 9. This generally reflects a decline in investment income from abroad combined with substantial payments on compensation of employees (payments to non-resident workers employed in Bhutan).8 percent from .

and 3. around Nu.65.7 percent of all budgetary grants. 28.5 percent from Nu.5 million to Nu. Higher official aid inflow from India by 46.7 percent from 2008/09 from Nu.1.1.1 percent towards the health and education sectors. while gross budgetary grant inflows expanded by 35. inflows of nonresident remittances. The net surplus in the current transfer account rose in 2009/10 from Nu.1 million) driven by a 25.3 percent to Nu.11 NRB Remittances 100% 80% 60% 40% 20% 0% Nu.9 billion for the fiscal year ending June 2010. largely in the construction sector against average wages and domestic expenditure) these remittances were estimated at Nu. 70. For more information on the composition and trend of grant aid to Bhutan.1.5 percent of GDP.7 percent increase in USD denominated remittances. equivalent to 14.2.3 billion for 2009/10. 11 percent for the energy sector. nonresident Bhutanese (NRB) remittances channeled through the banking system grew by 29.0 100 80 60 40 20 0 -20 -40 USD (values in Nu equivalent) Yen Swiss Franc Singapore Dollar British Pound Euro Danish Krone total % change (right hand) .6.6 percent in the year 2009/10 to Nu. These figures remain low-end estimates since other informal.2 million equivalent to Nu. decreased by 21. by 105. In the case of India.3 billion as of 2009/10.5 percent to Nu. Available data nevertheless reveal a sharp upward trend over Chart 3.6 billion to Nu. For the year 2009/10.2008/09. However.5 percent from Nu.4 billion was accompanied during the year by a 13. interest earned on deposits in COTI. Outflows related to debt servicing (interest payments on commercial and sovereign debt) increased by 16. workers’ remittances are provisioned as a proportion of concessional loans and grants received by Bhutan for development activities. interest earned on deposits in India fell by 74 percent from Nu. largely reflecting the global decline in interest rates. Since the coverage of banking data capture for both inward and outward remittances is limited. followed by 11.5 million equivalent.3 percent increase in grant aid from COTI. During fiscal year 2009/10.1 billion from Nu.2 million to Nu. For COTI. in value terms.8 billion in 2008/09. and estimated at Nu. supplementary data through informal surveys and sources estimate that net outward remittances were provisioned at Nu.7 percent were official (general government) inflows.7 77. (based on the number of workers. Yet another significant component of the current transfers account apart from the inflows of official grant aid is that of outward workers’ remittances.8 mill. and those from India are not captured through the banking system.8 million.670 million during 2009/10. Of this.0 54.5 percent towards the agricultural sector. whose contribution constituted 27.8 percent of budgetary grants received were diverted to the communications and infrastructure sector.8. Of total current transfer inflows. interest payment on Rupee debt constitute well over 80 percent of total interest payments abroad.191.856.1. 97.18. mostly on account of increased convertible currency debt service interest payments.6 billion to Nu.9 million for the year under review.9 million equivalent (USD 4.72.7 billion annually.202.6.411. please see Annex VI.222.9 billion.8 147.0 184. Similarly.8.

184. targeting the tourism.3 -1252. grants for hydropower development (entirely from India) continued to grow by more than 300 percent in 2009/10 to Nu.0 3185. Table 3. RMA.2 2.3 -37.2 7016. for 2009/10.8 1.1 1198.5 12.6 745. and comprising 51.3 4.8 76.6 percent per annum.3.2 percent to Nu. manufacturing and IT sectors.5 2215.5 percent of GDP.7 1015.10 Capital and Financial Account (Millions of Nu.3 11.9 percent of GDP corresponding to Nu.5 1. The net FDI flow into Bhutan in 2009/10 was positive at 0. with inward COTI remittances expanding at an average of 27.8 783.4 1139.9 7. Other sectors 1 2006/07 5095.4 4193.8 3816.4 635.8 2.5 6.5 1. RGOB Net loans. net direct investment flows into Bhutan experienced negative growth propelled by developments in other capital (liabilities by FDI enterprises to affiliated companies abroad) which decreased to Nu.3 percent of total NRB remittances) with Nu. registering 38.7 billion during the year.0 86. The majority of non-resident Bhutanese remittances appear to be denominated in USD assumed to originate mostly from the United States (96.9 106.6 million.6 percent of net capital and financial inflows. This trend is likely to continue over the 10th Plan period given the RGOB’s hydropowerdevelopment target of 10.1 billion.5 9.5. . overall capital transfers.0 534.5 -51.7 11. 6 of which are currently under construction.5 percent expansion in growth during 2009/10 to Nu.3.534.7 2007/08 5650. surged by 163.1 5.6 3719.1 billion) or equivalent to 11. there were a total of 14 approved FDI joint ventures as of 2009/10. Capital and Financial Account With sizable inflows related to official capital grants (associated with the development of the hydropower sector) and concessional borrowing.) Capital and Financial Account % of GDP Capital Transfers % of GDP Direct Investment in Bhutan of which % of GDP Other capital Reinvested earnings Other Investment of which % of GDP Net loans. An additional 9 FDI joint ventures are currently under review.3 2008/09 2009/10 (p) 5065.106 million for the year. Consequently.3 802.7 billion (2008/09: Nu.4 39. Riding on developments associated with the commencement of construction works on the 1020 MW Punatsangchhu Phase I hydropower project in 2008/09. FDI flows into Bhutan have picked up in the past few years. In terms of growth however.7 million during the year ending June 2010.0 2801.1 3238. Bhutan’s capital and financial account balance continued to record a surplus.000 MW by 2020.2 2762.6 0.1 Source: Research and Statistics Department.6 710.9 2941.1 8.5 1413.5 1111.3 2.2 547.the years.

3 billion. Bhutan’s net surplus fell by 6.0 Meanwhile.0 3000. which had reached Nu. Corresponding to this increase in the overall balance of payments was an increase in the country’s international reserves by an equivalent of USD 95.2 billion (2008/09: Nu.0 400.0 5000.3 percent at the end of 2009/10.7 percent of all Rupee loan disbursements that year.2 percent per annum.0 100.0 40.0 7000.1.0 Millions of Nu. remained elevated Months of imports Reserves/debt (%) at Nu.0 4000. One of the key reasons was the principal repayment on the SBI overdraft facility totaling Nu. while positive during 2009/10 were lower by 47. indicative of underrecordings in overall inflows of capital from India and/or COTI. Bhutan’s overall balance of payments was positive at Nu.1 billion). The latter made up 66.4.6.8 billion.8 percent to Nu.6 billion during 2008/09 (in 2009/10.13 Gross International Reserves 1000.1 percent as of 2009/10 to Nu.7 million in 2008/09.4. After provisioning for net errors and omissions. Flows associated with the Royal Government’s external debt obligations (net loans. Bhutan’s principal repayments on both concessional and private convertible currency debt also increased.4.2.1.0 700. This increase in the . Convertible currency loan disbursements however increased by 34.4 billion for the fiscal year 2009/10.4 billion in 2008/09 to Nu. During the year.0 500. increasing by 12. under other investment.0 20.1 CC reserves Rupee reserves billion as of 2008/09.9 billion in 2009/10.9 percent (Nu.4 million from USD 772.4.6.Chart 3.6. by 10. including interest payments of Nu.2 percent with total disbursements falling by 30. Chart 3. Notably.0 60. 50 40 30 20 10 0 -10 -20 2009/10 (p) Capital and Financial Account Capital Transfers Direct Investment in Bhutan % change in overall account (right hand) % 6000.6 percent for the year ending 2009/10.8 billion for the year ending June 2010. underpinned by the combination of substantially large current transfer receipts and capital and financial account surplus.0 300.39.0 0.1 billion for the year.2. Of this.0 Rupee 200.4 billion down from Nu. Rupee loan disbursements constituted 55.0 0. Bhutanese authorities continued to avail of the short-term overdraft facility from the State Bank of India at an interest rate of 9.12 Capital and Financial Account 8000.0 80.7 billion in 2008/09).0 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 120.0 1000.0 % Millions of USD The Royal Government’s principal debt repayment obligations on its Rupee loans. RGOB). attributed largely to the decreased disbursements towards Rupee as well as increased repayment obligations on convertible currency loans. net errors and omissions were positive at Nu.0 800.0 600.6 million).3 percent from Nu.0 CC 100.5.0 900.0 2000.4. total debt repayment on the SBI overdraft facility amounted to Nu.

respectively Trade Balance for the period under review.23. the current account deficit with India widened from 2008/09 to Nu.23. from USD 759. plasters) 2% Others 13% Hydropower 45% Chart 3. Moreover.4 billion.5 percent during 2009/10 to Nu. total reserves are adequate to meet 12.0 equivalent to 8 percent of GDP.4 billion.6.15 Major Exports to India.2. 2009 12 10 8 %6 4 2 0 Motor vehicles (10001500 CC) Gasolene/petrol High speed diesel Wood charcoal Cement (various forms) 6% Ferrous waste & scrap Coke & semi-coke of coal Coal. 0 commodity imports from India 2007/08 2008/09 2009/10 (p) 200.0 2000 exports to India. Current Account Bhutan’s net current transfer surplus Capital and Financial Account with India expanded by 60.4 percent rise in the convertible currency reserves.6 million to USD 838.4 billion.9 billion 6000 1000.3 percent of overall external debt as at the end of 2009/10.1 million to INR 1. briquettes & coal fuels Ferrous products Rice Dumpers .5 -400. 2009 Dolomite 2% Bars & rods (hotrolled.4.0 billion to Nu.5 -2000 0.4 billion or 6.2 Balance of Payments with India Nu. the net services.1 months of imports of goods and services) and 103. As of the year ending 2009/10.0 Customs records reflect a marginal 4000 growth of 0.9 billion. 800.14 BOP with India Chart 3.0 Nu.3 billion as of 2009/10. Overall. Particularly. On the other hand. 3.3 percent from Nu. and income account deficits deteriorated to Nu.23. -4000 -200.16 Selected Top Imports from India.6 percent in merchandise 600.28.gross international reserves was driven by a 10.1 percent of all current transfer inflows rose sharply by 46. corresponding to flows associated with foreign aid and debt.0 Similarly.0 increased by 20.3 months of merchandise imports (11.3 billion to 400. Millions Bhutan’s balance of payments with India for 2009/10 was characterized by a trade deficit of Nu.4 billion.5 million.5 percent of GDP (2008/09: 2 percent of GDP). Chart 3.2.0 -6000 billion and Nu.6.5 percent to Overall Balance (right hand) Nu. budgetary grant inflows from India which constituted 83. India Rupee reserves also more than doubled from INR 628. from Nu. of iron or nonalloy steel) 4% Copper wire 4% Carbide 5% Ferroalloys 19% Gypsum (anhydrite.

3.750. the net balance on the capital and financial account has increased from Nu.5 percent expansion in COTI exports.4 billion to Nu. Reasons for the turnaround include a significant deterioration in the trade deficit and the income account and modest growth in services and current transfer receipts. Meanwhile. Moreover.7 billion as of 2009/10. the capital and financial account balance with COTI was recorded at Nu.1. an increase of 15. 3. largely on account of a 102. Bhutan’s overall balance with India was positive at Nu. Millions 0 2006/07 -5000 2007/08 2008/09 -10000 Trade Balance Current Account Balance Overall Balance Capital & Financial Account Balance Tourism receipts during the year.1 million in 2008/09.3 billion as of 2009/10.150. the combined current account surplus and capital and financial account balances resulted in a positive overall balance of Nu.1.8 billion from the surplus of Nu. Chart 3. driven entirely by the 37.9 billion to Nu.4 billion to Nu. thus offsetting subsequent growth in debt servicing (both interest and principal) for India.9 percent growth in net inflows on sovereign debt that totaled Nu.670 million.Under the capital and financial account. declined 9.2 percent increase in commodity imports. earnings on depository investments abroad declined by 21.2 percent from in 2008/09.1.7 billion.5.4.5 million as of the end of June 2010. With the growth in capital and financial net inflows albeit the substantial current account deficit. . have more than doubled capital grant levels.3. After providing for possible errors and omissions.2 billion in 2009/10.7 percent to Nu.4 billion for the year ending June 2010.3 Balance of Payments with Countries Other Than India Bhutan’s balance of payments with COTI experienced a huge current account deficit of Nu. together with the short term over draft facility availed from the State Bank of India. on the other hand. As a result. new disbursements for both capital transfers and debt that commenced for the Punatsangchhu project from the previous year. Bhutan’s trade deficit more than doubled from Nu.9 billion as of 2009/10.4 percent from Nu. Despite a 43.17 BOP with COTI 10000 5000 Nu.

supported also by other financial inflows. Of Bhutan’s total Rupee debt outstanding (INR 22. The stock of external debt outstanding increased by 5. footwear. largely due to expansion in the trade account. while that of convertible currency debt outstanding increased marginally by 1.1 percent were outstanding on Indian Rupee debt while the remaining 41.4 percent as of 2009/10.Chart 3. headgear etc. As a result. The debt service ratio fell slightly to 29.8 percent from an equivalent of USD 794. Much of this development can be assigned to the growth in Indian Rupee debt outstanding which grew by 6. Grants flows and loans for the power sector are still projected to be substantial during the 10th FYP. 80. 2009 50 45 40 35 %30 25 Iron & 20 15 steel 4% 10 5 0 Magnetic discs & media 56% Mineral products 32% Machinery/electrical equipment Transport equipment & parts Textiles. Though Bhutan’s Rupee debt service ratio reduced slightly during the review period.3 million as of 2008/09.7 percent as of 2009/10. From the 2009/10 current account deficit of 14. Tala. out of which 58. concessional public and publicly guaranteed debt accounted for 96. while the residual was outstanding external debt of the private sector. Within the convertible currency loan portfolio. it continued to remain elevated at 31.3 percent of GDP. Plastic & rubber products Base metal & related articles Apples 3% Cardamo Cordycep m s sinensis 4% 7% Bhutan’s medium term outlook will be driven mostly by planned activities in the hydropower sector which will continue to be a major engine of growth and revenue during and beyond the 10th FYP (2008/09-2012/13). it is projected that Bhutan’s current account deficit will average to 17.4 External Debt Bhutan’s outstanding external debt stood at an equivalent of USD 840.19 Major Imports from COTI.5 percent as of 2009/10 against 30. it is expected that Bhutan’s overall balance will continue to show a surplus.18 Major Exports to COTI.6 percent. it is projected that Bhutan’s international reserves will be adequate to cover over 12 months of merchandise imports. 3.5 percent in the previous year. On average. and Punatsangchhu I projects).8 billion).9 percent were convertible currency debt (both concessional and private debt).2 percent were denominated public debt on hydropower (Kurichhu.6 percent of GDP in the medium term. 2009 Chart 3.4 percent. Debt servicing on Rupee debt remained high due to repayment obligations towards the State Bank of India overdraft facility.7 million at the end of 2009/10. cinematographic… . Processed food & beverges Palm oil (crude & other) Oranges 32% Optical. BOP developments will track associated flows under official aid and commodity and services imports.

5 19. on convertible currency & Rupee loans) as a percentage of the total export earnings (from India & other countries).6 38. ** Debt service payments as a percent of the export of goods and services. Corresponding to developments in Bhutan’s output and external debt levels.3 billion as at the end of 2009/10.1 30. with total outstanding debt at INR 21.7 3.9 2007/08 819. The Government of India continues to be Bhutan’s biggest lender.6 8.0 917.8 34. the Indian Rupee debt service ratio is the debt servicing on Indian rupee loans as a percentage of the export earnings from India.3 98.5 26.9 57.2 percent to an equivalent of USD 20.6 15.552.500.777.9 31. Convertible currency debt service ratio is the debt servicing on convertible currency loans as a percentage of the export earnings from countries other than India. . the 2008 GDP figure is used to calculate the ratio for 2008/09. GOI Standby Credit SBI Overdraft Debt/GDP ratio (%) Total Convertible Currency loan Indian Rupee loan External Debt (per capita.0 28.400.628.5 51.1 368.3 13. A status report on Bhutan’s external debt is included as Annex VI.4 50.6 67.9 3. the World Bank with USD 107.7 billion).5 80.4 million in 2009/10. Nu.2 63.6 36.2 2006/07 723. debt servicing on Rupee debt (hydropower and commercial) more than doubled from 2007/08 levels but did decline slightly to INR 7. the overall debt to GDP ratio improved from 70.2 30.3 46.445.391.e.0 1.7 18.1 percent as of 2008/09 to 63.8 18.8 54.964.4 21.7 352.1 349.3 2009/10 840.3 18.1 18.) Debt service ratio (%) Total Convertible Currency loan Indian Rupee loan 2005/06 780.5 19.184.4 * Based on calendar year GDP figures.7 million and the Government of Austria with an equivalent of USD 57.1 2008/09 794.5 3. followed by the ADB with USD 136.5 22. The total debt service ratio represents the total debt service payments (i.369.1 7.000.4 1.4 46.6 39.5 billion as of 2009/10 (2008/09: INR 7.4 million.11 External Debt Indicators Debt Outstanding (in millions) Total (USD) Convertible Currency (USD) Indian Rupee Of which.7 29.4 32.6 5.5 percent as of 2009/10.948. Similarly. Example. Debt servicing (repayments of principal plus interest) on convertible currency loans grew substantially by 61.0 2.9 million.5 16.400.8 308. Source: Department of Public Accounts & private sector enterprises.3 346. And as highlighted above.4 49.5 56.000.6 70.Table 3. The debt service ratio for the latest period is calculated based on the previous year's export of goods and services.

0 38.22 Appreciation (+) / Depreciation (-) of BTN/US Dollar (Monthly % Change) 5. per USD Nu. % Change Overall.0 43. the Ngultrum appreciated by 2. The Bhutanese Ngultrum is pegged at par to the Indian Rupee.21 BTN/USD: Fiscal Year Average 50. the Japanese Yen appreciated against the US Dollar. the Indian 1. Among other major currencies. the Ngultrum ranged between an average of Nu.6 percent for the year ending June 2010 as compared to June 2009.0 4.0 42.0 depreciated in line with increased volatility in foreign exchange markets and the flight from Euro to Dollar assets.48.4 percent from an average of 0.4 percent against the US Dollar from the fiscal year 2008/09.6 Yen per US Dollar in 2008/09 to 91.0 the general flexibility of the Indian Rupee and -2.0 Jul-09 Aug Sep Oct Nov Dec Jan-10 Feb Mar Apr May Jun Nu. by 8 percent from an average exchange rate of 98.0 exchange rates. the Rupee -4. The Euro appreciated against the US Dollar by 1. indicative of -1.0 Rupee and the Ngultrum appreciated in 0.0 capital flows were moderate.0 46.0 46.0 44. the Ngultrum appreciated by 2.0 42.20 BTN/USD: Monthly Movements.0 During the FY 2009/10.0 tandem against the US Dollar.0 36.0 48.0 47.0 40. However.46. 1 Jul-09 Aug Sep Oct Nov Dec Jan-10 Feb Mar Apr May Jun 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 .0 48. During 2009/10. with the onset of the Greek debt crisis -3.72 Euro per US Dollar in the same period.0 positive growth outlook for India. movements in the Ngultrum vis-àvis major international currencies are a reflection of developments in the Indian foreign exchange market.0 Chart 3.56 (June 2010) per US Dollar. per USD Chart 3.0 44. FY 2009/10 49. taking the average for the entire fiscal year.0 45. and as such.5 Exchange Rate Developments1 Chart 3. Recent strong growth in India has translated into the stability of the ngultrum vis-à-vis major convertible currencies.3. Capital flow developments in India remain a key source of volatility for movements in its 3. However.3 Yen in 2009/10.73 Euro to 0.0 towards the end of the year.48 (July 2009) and Nu. though 2.

keeping in view both internal and external sectors development. the fiscal deficit for the year increased to 6. (iii) Keep outstanding debt at internationally acceptable thresholds. the recent fiscal policy stance remained progressive with the budget deficit increasing to 6. (vi) Invest in industries with potential for significant revenue and employment generation. As a result. The increase in the overall spending is largely attributed to the incorporation of additional budget for both current and capital expenditures during the financial year. the fiscal policy initiatives of the government during the year 2009/10 continued to focus on boosting the economy’s capacity through investment in social physical infrastructure and growth oriented economic activities.1 percent of GDP in 2009/10. As in the past. there was a huge drop in revenue collection from sources such as non-tax revenue and other miscellaneous receipts. GOVERNMENT FINANCE Against the backdrop of promoting macroeconomic and financial management and achieving balanced and sustainable growth in the country. increased only marginally from 42. total government spending has increased substantially from 40. total revenue including grants. The 2009/10 national budget was geared towards achieving the core objectives of poverty alleviation by pursuing focused socio-economic development strategies within a sound macroeconomic framework. The macroeconomic framework is based on the general budget policy and fiscal framework (BPFF). from a surplus of 2 percent of GDP in 2008/09. Consequently. For the 2009/10 revised budget. Around 84 percent of the revenue-expenditure gap was financed through domestic sources.4 billion. With increasing pressure on resources to successfully achieve envisaged planned development goals. Thus. totaling Nu. (v) Maintain the momentum of investments in the socioeconomic sectors and. while tax revenue and external grants increased by over 40 percent each from 2008/09. On the revenue side.9 percent of GDP in 2008/09 to 49.9 percent of GDP in 2008/09 to 43. the current fiscal operation continued to be guided by the following policies: (i) Avoid current operating deficits.7 percent of GDP. Analyses of developments in the government fiscal operations are based on the National Budget Report published by the Ministry of Finance for the financial year 2010/11. This report also incorporates the 2009/10 revised budget and the projected budget for the 2010/11 financial year. (iv) Limit domestic borrowings by the government to avoid crowding out of private sector borrowings. .7 percent of GDP in 2009/10. (ii) Limit the overall fiscal deficit to GDP at sustainable levels.7 percent of GDP in 2009/10.4. it has also become necessary for the Government to manage public finances in the most effective and efficient manner possible.

3 40 billion as compared to 2008/09. On the other hand.1 Revenue and Grants Total revenue (including grants) Chart 4. with growth rates of 45. • Construction of RNR centers at Gewogs (sub-districts).9 percent in 2008/09 to 43. Energy • Ongoing efforts towards achieving 100 percent rural electrification by 2013.26 billion.1 Major 2009/10 National Budget Objectives A. 4. total revenue and 35 grants increased marginally from 30 42. Source: Ministry of Finance.1 25 percent in 2009/10. D. industrial and private sector development • Provide opportunities for economic growth and employment. B. As a percentage of GDP. • Preparation of DPRs for new hydro-power projects. • Developing overall capacity of the tourism sector. % of GDP .Box 4.5 percent in 2009/10 as compared to 23. • Provision of free education up to the tenth standard and enhance accessibility to quality education.1 Composition of Revenue during the financial year 2009/10.2 percent and 58. respectively.8 percent in 2008/09. F. 45 totaled Nu. Urban development. Social sector • Improve the quality of human lives through a sustained and professional health care system. C. Trade. higher by Nu. The slower growth in the total revenue during 5 the financial year is attributed to a 0 drop in the domestic revenue 2004/05 2005/06 2006/07 2007/08 2008/092009/10(r ) collection from sources such as nontax revenue and other miscellaneous Domestic revenue Grants Total revenue receipts. • Supporting general private sector development. growing by 12.7 percent and 10. Tourism sector • Construction of hotels and tourism related infrastructure. E. tax collection and donors’ assistance (in the form of grants) remained progressive. housing and public amenities • Implementation of urban structural plans.4 20 percent during the review period 15 down from its growth rate of 28 10 percent in 2008/09. Agriculture • Construction of farm roads. • Provision of basic urban amenities and services.

42 10.49 19. This increase in non-tax revenue during the financial year 2009/10 is mainly attributed to enhanced revenue collections through dividends and profit transfers.83 9. Business income tax from tour operators. Of total grants.07 5.83 36. an increase of 39.73 Other receipts 0.9 percent in the previous year.6 billion in 2009/10.9 percent.13 38.04 -0.23 1.06 Tax 10.58 7. mainly due to the growth in aid inflows and improved commitments by development partners. the increase in the total grants is attributed to the incorporation of additional budget under the Small Development Projects for local governments. . preparation of DPRs for power projects.82 2.98 1.37 13. contractors. corporate income tax accounted for 50. Of the total domestic revenue.441. Meanwhile. which financed over 52 percent of the total outlay during the year.Domestic revenue (excluding grants).23 5. while.35 0.47 34. which financed over 34 percent of the total budget outlay in 2009/10. and other bilateral and multi-lateral development assistance.75 12.07 Domestic financing (net) 5.43 -0.69 14.31 -2.72 18.15 0.81 11.5 percent in 2009/10. 2004/05-2009/10 Percent of GDP 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 (r) Total revenue (including grants) 33.1. Non-tax revenue collections. interest receipts. the remaining was on account of other miscellaneous receipts. and other non-tax revenue of the government.48 18. increased to 17 percent of GDP in 2009/10 as compared to 12 percent of GDP in 2008/09. In the revised budget.85 15.20 0.22 40.63 27.2 billion) at 12.65 -0. which comprise of dividends. capital revenue.59 11.197 million from the 2009/10 projected non-tax revenue. /1 Grants include both GOI grants and grants from other countries.4 million.67 -1.8 percent compared to negative 5.60 Capital expenditure/2 21.34 0. higher by over Nu. transfers of profit.02 17.85 49.2 percent in 2009/10 against the growth of 72.1. the Government of India (GoI) alone accounted for more than 58 percent in 2009/10. Foreign grants. SAARC Summit works.03 Expenditure and net lending 41.4. /2 Includes net lending. revenue collected from sales tax and import duty totaled almost Nu.8 billion) of tax revenues. respectively.00 -6. declined by 5. amounted to almost Nu.1 Highlights of Budgetary Operations.37 Non-tax 8.55 33.2 billion.7 percent (Nu. tax revenue and non tax revenue constituted 59 percent and 37 percent.56 20.22 22.21 38. Looking at major components of tax revenue.14 Overall balance -7.4 percent in 2008/09.57 34.68 Foreign financing (net) 2. Table 4.74 Current expenditure 19.594.61 Source: Ministry of Finance.71 0.00 12.79 14.30 -2. External grants (excluding GoI grants) recorded a growth of 96.91 19. Collection under personal income tax alone amounted to Nu. and other miscellaneous business entities amounted to Nu.93 Grants/1 13. followed by excise duty (Nu. Collections from dividends and profit transfers alone accounted for almost 62 percent of the total non tax revenue during 2009/10. administrative fees and charges.7 million in the review year.66 19.49 10.98 17.92 16.36 1.88 0.33 42.85 43.67 20.30 14.00 0.

printing and broadcasting services. In addition. The financial institutions engaged in lending to cottage and small industries and cooperatives have also been provided income tax exemptions. tax deductibles. sales tax and customs duty exemptions were also provided on computers.2 Fiscal Incentives 2010 During the year. Further. respectively. film and media industries. Source: Ministry of Finance. ICT. Sales tax and customs duty exemptions are also being provided on equipments and labour saving devices. the RGOB announced various fiscal incentives to stimulate private sector growth and employment generation in the country. Information and communication technology sector: An income tax holiday of 15 years has been provided to IT park developers. as summarized below. Specific Tax Incentives: Specific tax incentives include cross-sector incentives targeted at sectors such as cottage and small industries. and other construction machinery. IT and IT enabled service businesses operating in the IT parks are provided an income tax holiday of 10 years. transport. In the transport sector. I. . Education and health sectors: Education and vocational institutes operating outside the main cities are being provided with an income tax holidays of up to 15 years. Various levels of sales tax and customs duty exemptions are also being given to tourism related activities. Tourism sector: Income tax holidays of 10 years are provided to newly-established high-end tourist hotels and hospitality units. The exemption of sales tax and customs duty are also being provided on school conveyance. Film and media sector: Reasonable years of income tax holidays are provided to firms engaged in film animations. Construction and transport sectors: Sales tax and customs duty exemptions are being provided on the imports of heavy machinery. other forms of incentives such as exemption on income tax for export oriented business enterprises (other than tourism business). These tax incentives are comprised of three types. General Tax Incentives: General tax incentives are applicable to all sectors of the economy. a 5 year of income tax holiday has been provided to taxi and car-hire service providers.Box 4. media services. and exemptions. II. Sales tax and customs duty exemption have been provided on all farm machinery and other agriculture related inputs. earth-moving equipments. education and health. computer related accessories. tourism. construction. a 15 years income tax holiday along with sales tax and customs duty exemptions have been provided to waste management and recycling agencies. ¾ ¾ Agriculture sector: Commercial farming and related processing of its products are provided income tax holidays of 10 years. ¾ ¾ ¾ ¾ Besides the above tax incentives. With regard to the heath sector. Under this category of incentives. tax rebates and tax holidays are included. drilling equipments. Sales tax and customs duty exemptions are also being provided to public transport operators. III. Under this category. furniture and fixtures and education related construction materials. 10 years and 20 years of income tax holidays are provided to new cottage and small industries and cooperatives operating outside the city centres and in remote areas. imported construction materials and other inputs. a 10 and 5 year income tax holiday is being provided to newly established high-end private health services and pharmaceutical shops operating in far-flung areas of the country. the RGOB has introduced non-tax incentives such as direct cash subsidies. and has provided leverage to firms and industries engaged in exportoriented businesses. Sector Specific Tax Incentives: Sector specific tax incentives are related to the following specific sectors including agriculture. and domestic cinema production. sales tax and customs duty exemption has been provided to manufacturing and service industries for the import of plant and machinery. Besides these. text books and other stationeries.

The expansion in total expenditure reflected a higher level of budget allocation towards both current and capital expenditures for the review period. 30 50 iii)Other vehicles 20 30 iv)Motor vehicles for transport of goods (including dumpers and tippers) According to the notification issued by the RGOB. the RGOB took initiatives to revise the upward sales tax (ST) and customs duty (CD) on motor vehicles imports.Diesel Upto 1500cc 30 20 1500cc-2500cc 30 30 2501cc and above 50 30 3.30.8 billion. current exp (right hand) % change.Others 30 30 i) Motor vehicles for transport of 10 or more persons 30 30 ii) Vehicles used for travelling on snow.Box 4.1 . 36.5 billion. etc.6 percent. respectively. 4. the current expenditure budget stood at Nu. an increase of 25. vehicles cleared under bond arrangements (without payment of ST and CD) sold on or after June 2010 shall also be subjected to the levy of ST and CD. Categorically. Source: Ministry of Finance. golf cars.2 Expenditure Chart 4.3 Revision of Sales Tax and Customs Duty During the fiscal year 2009/10.13. capital exp (right hand) 50 45 40 35 30 25 20 15 10 5 0 Total expenditure during 2009/10 amounted to Nu.2 percent higher than that of the previous year’s outlay.2 Composition of Total Expenditure Nu. Millions 35000 30000 25000 20000 15000 10000 5000 0 2004/05 2005/06 2006/072007/08 2008/09 2009/10 (r ) Current Capital % change. During FY 2009/10. Petrol 20 30 Upto 1000cc 20 30 1001cc-1500cc 30 30 1501cc-2500cc 30 50 2501cc-3000cc 30 50 3001cc and above 2. the revision of sales tax and customs duty were applied to the following range of motor vehicles. This revision became effective from June 2010. Cylinder capacity (cc) Revised CD rate Revised ST rate (%) (%) 1. The share of current expenditure and capital expenditure to total outlay accounted for 45.4 percent and 54.

16 7. the capital expenditure stood at Nu. the RGOB undertook numerous measures to minimize and eliminate unnecessary public expenditures in the following identified areas during 2009/10: 1.05 2008/09 2009/10 (r) 18.16 0.00 2005/06 19.38 2007/08 18.48 31.92 6. 13.82 36.61 25.23 18.92 Source: Ministry of Finance. communications and energy sector) as a percentage of total outlay continued to be the highest. Notably.6 billion and was higher by 47. Source: Ministry of Finance.71 11. the RGOB made continued efforts to prioritize the sectoral budget in view of meeting the plan objectives. housing and community amenities. in accordance with Article 14 Section 6 of the Constitution (which states the government must “ensure that cost of recurrent expenditure is met from internal resources of the country”).5 percent in 2008/09 to almost 32 percent in 2009/10. On the other hand.71 16. respectively.60 8. increasing from 27. 1/Others includes public order services and cultural services Box 4. the percentage share of the budget outlay allocated to social services (health and education). . increased from 18. roads. the share of expenditure on economic services (comprised of agriculture.07 14.37 0.14 27.82 25. Generally.22 5.98 33. All proposals for the purchases of new pool-vehicles were kept on hold and no budgets were provided for new procurements.67 17.00 2006/07 22.14 10. reasons for the expansion in capital expenditure of 2009/10 budget included the incorporation of additional budget for activities such as the construction of monasteries and cottages for nuns. Similarly. Incorporation of additional project funds and the budget line provided for the adjustment of previous year’s advances are some of the driving factors for the increase in the current expenditure. Thus.8 percent.52 2. 3.98 13.44 13.16. mining and manufacturing industries. Similarly. the RGOB has resorted to expenditure trimming when there are delays in receiving income projected in the budget or when income is lower than previously estimated.45 7.2 Highlights of Budgetary Expenditure.4 Expenditure Cutting Measures It often becomes essential for the government to make adjustments to the fiscal imbalance by cutting down on unproductive expenditures.6 percent in 2009/10.2 percent from the previous year’s capital outlay.06 19. 16. Table 4. 2004/05-2009/10 Percentage of total expenditure Sectoral expenditure Social services Health Education Economic services General services National debt services Others/1 2004/05 17. general services and national debt services.12 11. Expenses on annual conferences were limited to biennial events. such adjustments may not necessarily address the underlying fiscal problems a country is faced with.48 6.4 percent and 15.21 8.32 6.7 percent and 13 percent in 2008/09 to 25 percent.80 22.36 25. . Expenditure on office stationeries.06 6.percent from the previous year’s current outlay. 2.18 5.04 14.50 12.02 15. printing and publication were reduced by 50 percent. In the sectoral budget allocation.46 27.31 2. During the financial year 2009/10. acquisition of land for green zone areas and the incorporation of supplementary budget received from donors for capital expenditure.60 12.

0 -6. In order to set up a credible domestic debt market. This is an increase to 6.5 percent to 11 percent) on the sale of Bills prior to 2001.3 Deficit financing 8. only 16 Fiscal balance Internal borrowing percent was financed through External borrowing external borrowings.0 -8. the discount rates on the Bills have now dropped considerably since the Bills are sold at market determined rates (on the basis of the 2009/10(r ) 2005/06 2006/07 2004/05 2007/08 2008/09 .0 Although the RGOB embarked on several expenditure cutting and revenue enhancing measures with the objective of maintaining a minimal and sustainable level of deficit at least during the medium term. four series (R201.4 billion.2 billion was issued on December 14. As of date. the revised budget of 2009/10 resulted in an overall fiscal deficit of Nu.4. % of GDP 2. The introduction of Treasury Bills is an integral element in the country’s process of liberalising interest rates and promoting capital and debt market development. R203 and R204) of Treasury Bills have been issued. However.0 Of this total deficit. Looking at the past trend in the operations of the Bills. particularly. Nonetheless.5 percent. The first issue of Treasury Bills worth Nu. short term secondary debt securities remains as an essential part of fiscal and monetary policies management. it also helped the financial market to create additional investment opportunities for domestic investors and fund managers. The remaining 84 percent of the fiscal deficit was met through internal borrowing.7 percent of GDP in 2009/10 from a surplus of 2 percent of GDP in 2008/09.0 0.3 Financing the Deficit Chart 4.0 -4.0 6. it has been observed that the RMA had been offering higher rates of interest (that ranged at 4. the RMA proposed that the government issue debt securities (government papers) on a regular basis. 4. institutionalization and operationalization of debt markets. respectively).0 -2.0 4. mainly because the Bills are sold at a fixed price at outright sale. to benefit budget process and liquidity management. with the operation of the Treasury Bills. The sale or auction of government securities not only helped the RGOB to borrow funds at a marketdriven price. R202. both from the perspective of issuing agents and market participants (as a reliable source of funds and investment avenues. 2009 and sold at a discount rate of 2. the Ministry of Finance and Royal Monetary Authority commenced their issue of the 91 days Treasury Bills (short-term financing) to replace the RMA Bills. mainly from the Asian Development Bank for its road network project and World Bank loans for decentralized rural development and education development projects.4 Developments in Treasury Bill Operations With the dual objectives of financing the domestic resource gap and to help develop the domestic debt market in the country.

Tracing its consistent prudent fiscal approach. maintaining outstanding debt at internationally acceptable thresholds. with the remaining budget allocated to meet current expenditure. In other words.7 percent in the total outlay. in millions 6000 Chart 4.31. Of the total capital expenditure. More than the half of the total budget is being allocated for capital expenditure. Nevertheless. 9-Dec-93 8-Apr-94 10-Aug-94 5-Jan-95 14-Jun-95 8-Nov-95 4-Apr-96 12-Sep-96 5-Feb-97 3-Jul-97 11-Dec-97 7-May-98 28-Sep-98 10-Mar-99 4-Aug-99 22-Dec-99 5-Jun-00 1-Nov-00 19-Mar-01 3-Sep-01 29-Jan-02 18-Jun-02 2-Dec-02 30-Apr-03 24-Sep-03 25-Aug-04 25-May-05 26-Apr-06 26-Apr-07 3-Dec-07 24-Jun-08 8-Jan-09 14-Dec-09 Bids Received (Nu.6 billion. Compared to the revised budget for 2009/10. estimated at 52 percent of the total outlay. The budget continues to focus on achieving the RGOB’s core objective of poverty alleviation by promoting socio-economic development activities within a sound macro-economic framework.Uniform Price auction). The 2010/11 budget has been formulated in line with the budget ceilings drawn from the 10th FYP and keeping in mind the RGOB’s capacity to generate matching resources and absorptive and implementing capacity of the budget agency. and maintaining the momentum of investments in socio-economic sectors while investing in industries with potential to generate additional revenue and employment. the RGOB is guided by a policy rooted in avoiding current operating deficits and limiting overall fiscal deficit at a sustainable level of GDP. Nu. Millions) Bids Accepted (Nu. or 42.4 Operations of Treasury Bills Discount rate (%) 12 5000 10 4000 8 3000 6 2000 4 1000 2 0 0 4.7 percent of GDP. the volume of the Bills issued continues to remain unmatched versus the availability of investible funds in the market. the 2010/11 budget estimates provide for a growth of 3. over 82 percent of the capital expenditure is estimated to be financed by external grants and loans. Millions) Discount Rate (%) 2010/11 National Budget Estimates .5 The total budget outlay for the FY 2010/11 has been estimated at Nu. the demand for Bills has attained an all time high in recent years. keeping external debt service to export ratio within low levels.

According to the 2010/11 budget estimates, it is expected that current expenditure will experience a 9.5 percent growth, mainly on account of the revision of the civil service and defense personnels’salaries, provident fund contribution, new official appointments, and interest payments. Salaries and wages alone will account for about 41 percent of total current expenditures. Meanwhile, interest payments for the year are estimated at Nu.1.8 billion, of which 83 percent is on account of the Tala and Kurichhu hydropower loans. Interest payments on domestic loans are estimated at Nu.81.99 million. Interest payments are estimated to account for 12 percent of the total current expenditure budget. Meanwhile, residual current expenditures totaling Nu.753.3 million has been budgeted to cover subsidy requirements towards the Druk Air, Bhutan Broadcasting Service Corporation, Rural Life Insurance Scheme, Thimphu Thomdey (municipal), and Bhutan Postal Corporation.
Chart 4.5 Expenditure Allocation Reviewing the sectoral budget allocation, of the total current 50 expenditure, health and 45 education services account for 40 Nu.1.5 billion and Nu.3.2 billion, respectively. Similarly, 35 general public services, and 30 economic services (agriculture, 25 mining and manufacturing, 20 roads, housing and community amenities, communications and 15 energy) were allocated 3.7 10 billion and Nu.2.9 billion, 5 respectively, while, the 0 remaining were budgeted for cultural, national debt, and law 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 (r) and order services. On the Current Capital Total expenditure& net lending other hand, of the total capital expenditure, economic services were allocated almost Nu.9.6 billion, followed by social services, national debt services and general public services at Nu.3.5 billion, Nu.3.4 billion and Nu. 2.3 billion, respectively.

The net lending component under capital expenditure is provisioned at Nu.1 billion. Of this amount, Nu.953.4 million is allocated for rural electrification projects and the remaining is allocated for rural credit related activities. Total revenue including grants, is projected at Nu.26.8 billion, or 36.2 percent of GDP. Of this amount, 13.7 percent is expected to be financed through tax revenue, mainly collected from corporate income tax (hydropower companies), business income tax, personal income tax, and sales tax and excise duties. Under non-tax revenue sources, dividends and interest from corporations are expected to contribute Nu.5.7 billion to domestic revenue. Based on the development partners’ commitments and agreements, total grants are estimated at Nu.10.9 billion. This constitutes about 41 percent of the total revenue and covers about 33.6 percent of the total expenditure.

% of GDP

Considering the resource mobilization and expenditure allocation efforts of the Royal Government, the overall fiscal deficit for the year 2010/11 is estimated at Nu.4.8 billion (6.5 percent of GDP), higher by Nu.714.7 million as compared to the 2009/10 revised budget. To finance the revenueexpenditure mismatch, net external borrowing of Nu.1 billion and net internal borrowing of Nu.3.8 billion is forecast for 2010/11. In that connection, it is expected that the RGOB will resort to external borrowing from the World Bank and the Asian Development Bank.

Chart 4.6 Level of Deficit Financing
50 40

% of GDP

30 20 10 0

2004/05

2005/06

2006/07

-10

Total revenue (incl. grants) Total expenditure & net lending Fiscal balance

2009/10(r)

2007/08

2008/09

5.

WORLD ECONOMY

According to the latest World Economic Outlook of the IMF, economic recovery around the globe is proceeding as expected. While growth in most advanced economies and some emerging economies remain sluggish, growth in the developing and emerging economies appeared to be stronger. The financial sector in the developed world is still vulnerable to shocks, while developing economies have fared better in light of more prudent macroeconomic policies adopted in the advent of earlier crises. Advanced economies grew at a collective rate of 3.5 percent during the first half of 2010 which is considered very low considering these economies are in recovery mode after a catastrophic recession. Consumption in the United States has grown since the third quarter of 2009, but at low levels. On the other hand, advanced Asia, with the exception of Japan, enjoyed a strong rebound with their manufacturing sector benefiting from a global rebound in trade, elevating growth to pre-crisis levels. Japan and the Euro area, remain largely dependent on foreign demand, and growth in output recorded below pre-crisis levels. However, fiscal stimulus packages in Japan have been instrumental in boosting growth and output since the last quarter of 2009, while demand in the Euro area is constrained by its dependence on bank credit and over-cautious bank lending. However, a depreciating Euro is expected to further support its tradable goods sector. Growth in emerging economies during the first half of 2010 was 8 percent, led by Asian and Latin economies and the exp ansion in fixed investment. In emerging Asia, growth reached 9.5 percent with the spread in domestic demand from China and India to other Asian economies. China’s growth in domestic demand by 13 percent stemmed from fiscal stimulus and a huge expansion in credit to boost household incomes and consumption. Authorities are now focused on a transition from public stimulus to more private-sector led growth. Meanwhile, most of the developing world was less affected by the global recession, and are now feeding in the pick-up to global trade, except for parts of emerging Europe and the Commonwealth of Independent States. Despite the expected pace of recovery world-wide, the IMF identifies a multitude of sovereign and banking vulnerabilities that loom ahead. In particular, sovereign risks associated with the withdrawal of fiscal stimulus, incomplete regulatory reform, weakness in real estate markets bearing on the stability of financial institutions, and high unemployment remains major issues of concern. According to the IMF, sustained economy across the globe rests on both internal rebalancing, with the strengthening of domestic private demand in advanced economies, allowing for fiscal consolidation, and that of external rebalancing, with the growth in net exports in deficit economies and a decrease in net exports in surplus economies, mostly that of emerging Asia. It is imperative that fiscal consolidation push forward in 2011 and that necessary financial sector reform take charge in advanced economies to re-start growth in credit. In the latest update on the world economic outlook, the IMF expects recovery across the world to be in line with previous forecasts with the negative and positive growths

countering each other. Projections for the years 2010 and 2011 indicate world growth to expand by 4.8 percent in 2010 and by 4.2 percent in 2011. Inflation is expected to be rather contained in the projection period in light of excess capacity and high unemployment. Policymakers in emerging Asian economies have successfully intervened to slow credit growth with prudential regulation. As monetary policy remains supportive in most economies, fiscal policy is anticipated to tighten during 2011. In some emerging economies such as India, capacity constraints are expected to place upward pressure on prices. Table 1.1 World Economic Outlook, October 2010
Percentage change (year-on-year) Actual Projection 2008 2009 2010 2011 World Output1 World Output 2.8 -0.6 4.8 4.2 Advanced economies 0.2 -3.2 2.7 2.2 Emerging and developing countries 6.0 2.5 7.1 6.4 Memorandum items: Developing Asia 7.7 6.9 9.4 8.4 Bhutan 5.0 7.4 6.8 6.6 India 6.4 5.7 9.7 8.4 Consumer Prices Advanced Economies 3.4 0.1 1.4 1.1 Emerging and developing countries 9.2 5.2 6.2 5.2 Memorandum items: Developing Asia 7.5 3.1 6.1 4.2 Bhutan 9.0 4.1 7.0 4.5 India 8.3 10.9 13.2 6.7 Indicator
Source: World Economic Outlook, October 2010, International Monetary Fund. 1) Real GDP growth.

inflation fell significantly in Maldives (largely from discontinuing deficit monetization) and Sri Lanka (from monetary policy tightening).1 percent as its tourism industry. especially food and oil. Export growth in 2009/10 has generally slowed in the region resulting in an increased current account deficit. As a result. the overall inflationary impact of increased commodity prices have also have relatively persistent in India. 1 . took a hard hit in 2009 because of the global crisis and the H1N1 influenza pandemic. from about 5 percent in 2007. the region witnessed increased expenditure and fiscal deficit in 2009/10.6. and accommodative monetary policy have contributed to increasing inflationary pressures. performance within the SAARC countries has been mixed. According to the IMF. The Indian economy experienced a 7. MACROECONOMIC INDICATORS FOR THE SAARC REGION Table 6. Inflation persistence refers to how long a deviation in inflation (following a shock) from its long-run value persists. On the fiscal front. According to the IMF’s Regional Economic Outlook for Asia and the Pacific (October 2010). slowing export growth and strong domestic demand in the Asia region as a whole is expected to decrease Asia’s current account surplus to about 3 percent of regional GDP in 2010 and 2011.1 on the selected macroeconomic indicators of SAARC member countries has been updated based on data available in the annual reports and websites of the respective central banks and the IMF. as it continued to maintain an expansionary monetary and fiscal stance in response to the global crisis. Increased international commodity prices. the Maldivian economy contracted by 3. While Asia has led the recovery in general. On the other hand. one of the highest in the world. India continued its expansionary fiscal stance to help aid economic recovery from the global crisis. Inflationary pressures however have varied across the region.4 percent growth in GDP in 2009/10. fiscal deficit as a percentage of GDP increased by 1 percentage point over the previous year. India exhibited strong upward trends in its WPI inflation on account of high food and oil prices. as a result of which. which contributes a third of the GDP. Fiscal year 2009/10 has been a year for recovery following the global recession in 2008/09. the persistence1 of food price inflation is higher and food price shocks feed more strongly into non-food prices in India compared to other advanced and emerging economies. On the other hand.

7 46.1 59.0 7.2) (29.3 35.9) (2.5 9.2) (4.9) (0.8 14.0 11.0 24.3 7.5 (4.3 11.0 14.2 19.5 (1.5 (RE) 52.4 14.2 4.1 3.4) (2.0) 19.4 43.9 7.5 22.1 14.7 4.4) (28.4 2009/10 15.7 15.1 (10.7 17.1 59.4 7.7 11.9 8.8 14.8 7.9 14.2 5.6 19.9 15.8 11.8 6.7 6.7 10.2 17.2) (16.0 7.2 5.8 5.7 3.2 23.8 20.3 19.2 9.1 14.4 7. Inflation: CPI (% change) 2/ a) Afghanistan b) Bangladesh (1995/96=100) c) Bhutan (Third Quarter.1 (P) 5.0) 18.1 17.7) (2.1) (6.0 7.7 38.8 7. for industrial workers) e) Maldives (2004=100) f) Nepal (1995/96=100) g) Pakistan (2000/01=100) h) Sri Lanka (2002=100) III.1 15.2 6.9 63.6) 0.4 60.8 (2.8) (1.4 6.9 22.2 4.1 9.6) 2.8) (0.3 33.9 8.6) (4.2 6.7 23.1) (3.8 49.7 48.2 10.6) 0.4) (6.2) (7.8 9.1 24.0 13.7 16.Table 6.3 5.9 15. 2003=100) d) India (1982=100.1 11.9 18.0 8.0 16.8 9.9) (7.0) (7.1 12.5) (6.8 6.7 18.4 7.6 19.8 7.8 6.9 16.8 6.7 7.8 (2.4 12.9) -4.9 36.8 34.8) (4.1 42.5 6.8 14.8 10.9) 15.7 2.4 21.5 2007/08 12.3 15.6) (9.1 11.7) (3.0 4.7 (3.4 (3. Government Budget (% of GDP) Total Revenue and Grants a) Afghanistan b) Bangladesh 3/ c) Bhutan d) India e) Maldives f) Nepal g) Pakistan 3/ h) Sri Lanka Expenditure and Net Lending a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka Overall Budget Balance a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka 2005/06 13.6 10.1 40.5 14. Growth in Real GDP (% change) a) Afghanistan b) Bangladesh (1995/96 prices) c) Bhutan (2000 prices) 1/ d) India (1993/94 prices) e) Maldives (1995 prices) f) Nepal (2000/01 prices) g) Pakistan (1980/81 prices) h) Srilanka (2000 prices) II.4 2006/07 8.8 9.6 6.9 6.3 14.7 4.7) (4.2 4.4 21.4 65.9) (1.4 38.0 6.0 3.5 14.9 14.3 13.9) .6 13.0 6.1) 3.2 6.3 18.0) 2.2 16.9 14.8 17.0 22.2 20.9 11.9 (2.2 14.8 2008/09 3.5 6.9 4.7) (7.0 56.1 6.6 19.0 3.4 5.3 (2.7 3.0 15.7 6.6 (3.0 (6.8 34.9 8.7 9.1) (7.1 Selected Macroeconomic Indicators for the SAARC Region (Indicator*) I.0) 16.7 7.6 8.9) (3.5 18.

3) 2.7 (6.8 (1.5) (119.6 16.0) (12.0) (2.2 3.5 (6.7 5.608.3) 30.9 (13.3) 32.330.2 (3.370.3) (2.0 15.0) (5.8 7.2) (36.6 4.7) 2.4 9.4 13.0 (3.9) (51.0 5.(Indicators*) IV.2 16.2) (30.7) (1.0) (4.4) 2.5) 2.4 (4.7 (0.9 0.0) (2.002.3 26.6 23.5 4.6 10.2 0.9) (30.0) (4.0 (2.0) (736.060.6 25.905.889.9 15.971.0) (90.335.7) (2.0) (493.9) (2.5 10.5) 2.707.1) (2.5 10.0) (3.9 3.7 (13.1) (1.8 (1.2 3.6 14.2) 9.0) 0.3 4.0) (3.0) 2.5 21.6) 23.7 11.4 29.459.8) (102.8 24.3 (9.4) (8.1 15.2) (27.3) (9.9 18.7) 5.7) (3.0) (11.0) (3.3) 24.0) (9.2 10.8) (2.4 40.0) 11.4) 6.4 4.0) (298.8) (2.6) (49.0) (9.8 31.4) 4.0 14.2 12.3 6.1 41.1 (5.2 2.0) (0.9 31.516.5 3.1) (682.7) 2.1) (33.7 (12.1 16.8) (1.2) (3.8 39.6) 19.5 4.3) 0.2 0.627.9 0.3 3.1 2.7 (64.977.933.8 81.7) (0.4 2.4 47.5 (3.9) (2.4) (51.0) (0.0 8.5 16.3 (1.4 (10.5 35.657.927. Trade and Balance of Payments 4/ Exports Growth Rate (US$ values) a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka Imports Growth Rate (US$values) 5/ a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka Trade Balance (US$ millions) a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka Current Account (% of GDP) a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka Capital and Financial Account (% of GDP) a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka 2005/06 2006/07 2007/08 2008/09 2009/10 0.4 12.0) (5.2 7.0) (122.841.8 28.0 11.0) 46.0) (590.2) (1.4) (90.0) 11.0 10.7 (5.423.9 21.6) (6.5 3.8 (4.0 17.3 0.3 8.0) (3.6) 2.9) 1.2 (4.122.0 13.3 3.9 (2.0) (4.6 39.6) 2.4 15.2) 16.708.6) (3.981.5(P) 26.7 1.4) (889.9 2.0) (72.890.8) 0.4) 12.4 45.442.0) (1.0) (2.944.4 .5) (2.0 20.9) (4.265.0) (11.293.1) (4.1 35.4 25.6 19.7 (4.2 (6.9 (4.5 (0.9) (5.6 21.1 (10.3) (41.569.8 0.4 17.

5 6.1 51.4 12.8 65.7 115.9 15.6 78.6 45.5 34.3 8.5 4.3 17.4 Debt Service Ratio (% of X G & S) a) Afghanistan 5.9 30.8 68.1 19.6 83.0 h) Sri Lanka (M2) 19.0 155.8 47.7 1.3 21.1 27.6 .0 b) Bangladesh 30.2 g) Pakistan 13.2 68.8 25.6 2.9 46.2 19.3 21.1 70.2 24.2 13.0 27.5 h) Sri Lanka 7.6 21.9 28.6 0.1 c) Bhutan 26.7 9.7 18.2 4.4 10.3 17.6 17.2 18.8 e) Maldives 6.8 74.8 30.0 12.7 31.8 d) India 17.4 39.8 65.3 4.1 f) Nepal 10.6 d) India 9.9 f) Nepal (0.8 f) Nepal 72.3 12.8 76.1 12.7 45.0 35. External Debt (end of period) Total External Debt and Liabilities (% of GDP) a) Afghanistan 184.2) 12.7 18.6 67.1 49.0 21.3 19.2 c) Bhutan 14.3 89.8 51.9 4.9 e) Maldives 22.2 22.7 19.2 19.6 27.4 24.6 d) India 17.5 19.0 68.7 108.1 28.7 44.6 8.5 g) Pakistan 59.6 18.2 78.1 25.4 4.8 31.7 44.9 27.6 Broad Money (M2) Annual Growth a) Afghanistan b) Bangladesh 19.0 107.4 26.(Indicator*) 2005/06 2006/07 V.5 22.8 e) Maldives 50.0 8.2) 14. Exchange Rate Per US Dollar a) Afghanistan 49.2 d) India 44.7 VI.5 63.0 21.9 70.3 32.9 16.7 1.9 f) Nepal 35.6 10.0 19.2 e) Maldives 12.1 16.1 c) Bhutan 98.1 5.0 12.1 29.7 9.6 3.8 d) India 21.2 6.4 39.0 62.7 21.3(P) 71.3 12.5 28.3 2.8 30.6 12.9 60.9 b) Bangladesh 67.7 h) Sri Lanka 102.0 g) Pakistan 15.8 12.5 18.9 4.4 20.1 19.8 c) Bhutan 44.0 32.0 24.6 15.5 9.5 18.3 80.0 1.1 16.1 10.1 17.4 VII.5 e) Maldives 10.8 2007/08 2008/09 2009/10 20.6 38.1 70.0 h) Sri Lanka 6/ 53.4 23.5 22.3 49.4 5.4 27.6 18.7 h) Sri Lanka 22.9 5.1 51.3 18. Monetary Aggregates (end of period) Narrow Money (M1) Annual Growth a) Afghanistan b) Bangladesh 20.7 4.9 11.6 40.6 60.0 37.1 43.2 g) Pakistan 27.6 22.0 49.5 g) Pakistan 13.6 b) Bangladesh 6.3 4.2 f) Nepal (1.9 27.0 18.6 19.8 12.9 12.3 5.8 c) Bhutan 7.9 114.

0 1.(Indicator*) Reserve Money (M0) Annual Growth a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka Income Velocity of Money (GDP/M2) a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka Money Multiplier (M2/M0) a) Afghanistan b) Bangladesh c) Bhutan d) India e) Maldives f) Nepal g) Pakistan h) Sri Lanka 2005/06 27.0 14. IMF Country Report No.5 2. 4/ Trade and current account figures for Bhutan and corresponding growth rates have been calculated based on Ngultrum equivalent figures. 10/22 (Jan 2010) & 10/40 (Feb 2010).2 1.8 2.2 1.4 23.2 2.5 2.5 3.1 2.9 4. NSB.9 1.9 1.2 11.5 4.4 1.6 1.2) 23.2 3.9 10.9 1.4 13.1 44. 2/ End of period.0 2. also for Pakistan . 5/ Import values are fob except for Bhutan & Maldives which are cif.4 5.0 2.4 19.2 3.6 2. .0 4.7 2. Central Bank of Sri Lanka.8 1.4 5. Bangladesh Bank Annual Report 2008-2009 & Monthly Eonomic Trends November 2010.3 17.1 1.0 2007/08 14.7 15.4 27.4 3.8 (3.5 2. 10/73 (Mar 10) : Maldives Monetary Authority Annual Economic Review 2009 : IMF Country Report No. XG&S: Export of goods & services. Annual Report 2009.2 15.0 16.0 *) Data for Maldives and Sri Lanka are on a calendar year basis. and Bhutan which are quarterly averages compiled with third quarter 2003 as the base.7 2. 6/ Including banking sector external liabilities.0 7.4 1.3 1.3 1. State Bank of Pakistan. For example.9 (1.9 21. Da Afghanistan Bank Annual Bulletin 2008-09.3 10. (QE) Quick Estimates.2 4. DRC and DPA. 1/ GDP data for Bhutan was rebased to 2000 in 2005. Reserve Bank of India.3 2.3 3.0 14.7 1.4) 31. 10/333 (Oct 2010). For example.2 2006/07 22.3 3.3 3.3 3.5 14.6 2. Data are on a calendar year basis. 3/ Excluding grants.8 2.6 4.2 4.8 21.6 20.8 2.7 1. except for Nepal and Maldives which are annual averages.9 2.7 2.6 4.4 5.2 5.3 2.consolidated federal and provincial governments. Point-to-point.7 1.5 2.3 1. Nepal Rastra Bank Economic Report 2008-09 : Annual Report 2007-08. : IMF Country Paper No.3 17.9 4.9 31.2 2.7 1.2 1.0 40. : Annual Report 2008-09.7 4.10/185 (Jul 2010). entry under 2006/07 is for CY 2006.9 1. Ministry of Finance. IMF International Financial Statistics.1 35.2 1.7 2009/10 25. (P) Provisional.8 22.2 4. (RE) Revised Estimates.10/55 (Feb 2010).0 5. entry under 2006/07 is for CY 2006.2 2.8 2.2 1.7 4.2 1.8 1.9 1.3 3.0 17.1 1.3 2008/09 64.5 1.6 3. : IMF Country Report No.4 6.2 1.1 3.7 2. Sources: Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka : IMF Country Paper Nos.5 1.2 1. : RMA.2 6.

GOVERNANCE AND ORGANIZATIONAL DEVELOPMENT .II.

this activity. Supervision and Regulation of the Financial Sector A secondary objective of the RMA is to formulate and apply financial regulations and prudential guidelines to promote good governance and to ensure stability and integrity of the financial system against potential systemic risks. and which complement the primary objective. promoting. FUNCTIONS OF THE ROYAL MONETARY AUTHORITY OF BHUTAN In accordance with the Royal Monetary Authority Act of Bhutan 20101. implying...e. for example. In the “small economy case” and/or countries at a relatively early stage of economic and institutional development. the RMA’s core functions. .e. i. c) Promotion of Financial Sector Stability and Development This refers to the establishment and promotion of an effective financial system. the avoidance of a large Ngultrum liquidity build-up. the one-to-one peg between the Ngultrum and the INR. In this connection. are outlined below [b) through h)]. the central function and the subsidiary functions can be summarized as follows: a) Primary Objective is to Formulate and Implement Monetary Policy with a View to Achieving and Maintaining Price Stability In view of the close economic and financial ties between Bhutan and India. supervising and b) 1 Prior to the RMA Act of Bhutan 2010.1. Monetary policy. (e. which is aimed at achieving price stability. in Bhutan and on the Maldives) there is a very good case for making the central bank responsible for financial institutions’ supervision (including all financial institutions) on account of economies of scale and the central bank’s financial sector expertise. which involves making available sufficient INR on demand. ensuring that financial transactions necessary for the smooth functioning of the economy can be carried out with a minimum amount of cost and time involved. This also includes the licensing of financial institutions. one might think at a later stage of development of creating a separate institution for financial institutions’ supervision. is confined to the support of the peg. the RMA Act of 1982 was in effect. i.. the RMA has to be a facilitator of advanced clearing and transfer systems. the provision of at least 100 percent reserve backing for all Ngultrum issued.g. comparable to international best practice. credible RMA and government policies. All the other secondary and subsidiary functions. which in quite a few countries is carried out by a separate institution. involves insuring that deposit money banks and other financial institutions conduct their business on a sound prudential basis and according to the various laws and regulations in force. Please see Section 2 for a more detailed description of the RMA’s monetary policy framework and further on in this section for a schematic overview. which are also very important. together with additional confidence-building measures for the Ngultrum. or even several separate institutions. In larger developing countries. an exchange rate target was chosen. In general.

The central bank may make temporary advances to the government. non-inflationary liquidity. with due regard to liquidity.if necessary. and micro-finance institutions. Guarding international reserves usually implies also the responsibility for the exchange rate policy (in Bhutan the external value of the Ngultrum is declared by the government on recommendation of the RMA’s Board. reserve management also includes the formulation. in India). while the RMA has to implement and support it). The RMA may also be requested to advise the government on any matter related to its functions. the credit conditions in the country. which could be represented. safety.. monitoring. as in various other developing countries (e. the availability of certain specialized institutions. reserve management (with a view to the prudential management of the funds. Since 2002. and enforcement of foreign exchange regulations.1000 note printed by G&D. 2 . All of this shall in turn be carried out to promote macroeconomic stability and economic growth in Bhutan. the willingness to discount commercial and government paper. an agricultural development bank. powers. including gold and foreign currency reserves. and external debt management on behalf of the Ministry of Finance. and profitability. The Bankers’ Bank This function includes the acceptance of deposits as prudential reserves for banks (e.g. In Bhutan. operating national and international payments and settlement systems including the electronic transfer of funds by financial institutions. and a capital market. It also involves the provision of central clearance facilities for inter-bank transactions. and the facilitation of a money market. for example. and transactions relating thereto. and duties.1 denomination currency note. by an industrial development bank. thereby providing the economy with sufficient. or any proposal. and the commitment to act as “lender of last resort” to banks in the case of short-term liquidity shortages. The Advisor to the Government The RMA may advise the government on any matter relating to its functions. primary and secondary markets for securities. but if possible.. and may be the depository of the government. measures.g. minting of the Chhetrum (in India) has been replaced by the reintroduction of the Nu. in that order). powers. d) The Bank of Issue2 The RMA has the sole right to issue notes and coins for the purpose of directly influencing the amount of currency in circulation outside banks. Of importance are also the establishment of a deposit insurance system. Germany). De La Rue (with the exception of the Nu. The Government’s Bank The RMA is the banker and the fiscal agent for the government. and duties. other entities and individuals. implementation. a foreign exchange market. e) f) g) h) Bhutan’s currency notes are printed by the UK-based firm. The Guardian of the Country’s External Reserves The RMA is the depository of the official external assets of the country. minimum reserves). although some coins remain in circulation.

the supply of notes and coins to banks (currency chest) and the public (RMA counters). Foreign Exchange. and development and installment of a computerized cataloguing system. reviewing the adequacy of the controls in place to protect it from those risks. Information Technology.All the functions are carried out under the general supervision of the Board of Directors by the RMA’s executive management team with the close support of its departments. and verifying that the controls are working as intended. It interfaces between the Governor’s Office and other Departments within the RMA. Furthermore. as. Departments under the Operations Department include Banking. the financial institutions’ accounts. Currency Management and Administration and Finance. the maintenance of the office building and the premises. Payment and Settlement. soiled notes are sorted * * * . The Management Secretariat extends administrative and policy-related assistance to the Governor. the management and supervision of security. the management of the pool vehicles. Hospitality and Protocol. in a nutshell. the foreign exchange accounts and the central accounts. and Research and Statistics. The Hospitality and Protocol Department is responsible for the organization of protocol activities. as follows: a) Departments Directly under the Governor * The Internal Audit Department is responsible for examining the risks that the RMA faces. The work of the Currency Management Department involves the printing of notes and minting of coins. please see the latest RMA organization chart in the first section of the report. for example. The basic responsibilities of the eleven divisions can be summarized. cataloguing of the Library’s books and periodicals. as well as with other government and non-government Bhutanese and international organizations. and dealing with any matters related to “counterfeit notes”. registration of books and periodicals lent out. while those under the Policy and Programs Department include the Financial Regulation and Supervision. The Library operates under the management of the Management Secretariat and provides all the necessary library services. while at present there is one DMD responsible for both the Operations Department and the Policy and Programs Department. ordering of books and periodicals. The Internal Audit Department and Management Secretariat are directly under the Governor. b) Departments under the Operations Department * The Banking Department maintains the Government accounts. For a comprehensive overview of the organization structure. The DMD is an observer on the Board of Directors.

and manages Bhutan’s convertible currency and Rupee reserves (the latter are in the process of being taken over from the two commercial banks) with regard to liquidity. This Department is also responsible for bridging present and future human resource gaps by matching RMA officials with training opportunities. for example. in Bhutan and abroad. leave management. The Department is responsible for the development. which it explores. monitors. * The Payment and Settlement Systems Department The Payment and Settlement Systems Department is a new Department in the Royal Monetary Authority which became operational with effect from April 7. 2009. oversight and efficiency of the payment and settlement systems in the country which currently includes the Cheque Truncation System. and monitors money laundering. provides information on exchange rates. and enforces foreign exchange regulations. safety. regulation. issues and monitors regulations. * The Financial Regulation and Supervision Department supervises regularly all financial institutions by means of on-site and off-site inspections on the basis of internationally accepted financial sector practices. The functions of the Department include the following: ƒ ƒ ƒ ƒ ƒ Development of payment and settlement systems in the country. work related to inventory and stores. National Electronic Clearing System (NECS) Debit. c) Departments under the Policy and Programs Department. * .into re-issuable and non-re-issuable notes. including. Laying down standards for payment and settlement systems. the maintenance of personnel records. The Foreign Exchange Department drafts. recruitment. in that order. * The Administration and Finance Department is generally responsible for administrative matters. and profitability. implements. National Electronic Funds Transfer (NEFT) and the National Financial Switch. The Department is also responsible for monitoring the operations under SWIFT and the Asian Clearing Union (ACU). Regulation of payment and settlement systems. Oversight of payment and settlement systems. releases foreign exchange. National Electronic Clearing System (NECS) Credit. and the maintenance of the administrative accounts. while non-re-issuable notes are destroyed. licenses new institutions. Formulation of payment and settlement systems policies.

e. Selected Economic Indicators. hardware management and support. and support.. the government. advice to the management and government. and the Monthly Statistical Bulletin. The Research and Statistics Department is responsible for research and statistics. and the public.* The Information Technology (IT) Department is involved in all aspects of developing and maintaining the RMA’s IT system. and applications systems and database development. management. the production and timely finalization of the Annual Report. and the provision of statistical and economic information to management.g. * . IT planning and monitoring.

In other words. The peg has clear benefits for trade with India. an independent monetary policy in Bhutan is precluded. Monetary policy is confined to the support of the peg.. including the following basic measures: • Making available sufficient INR on demand to avoid the emergence of a parallel market. more or less. *) By default. 1) • Sterilization of a part of the BTN liquidity in the banking system to avoid a possible build-up of inflationary pressures.1) Elements of a Currency Board. 1) • Provision of at least 100% Reserve backing for all BTN issued as a confidence-building measure. . The arrangement maintains confidence and ties Bhutan to the relatively stable monetary conditions in India. SUPPORTING FACTORS Very close economic and financial relationships between India and Bhutan. Inflation and interest rates in the two countries are closely related. Dual currency system. • Credible policies of the RMA and the government for the enhancement of the public‘s confidence in the BTN. since there is no uncertainty about exchange rate developments between the two trading partners. with the BTN and the INR circulating freely side by side in Bhutan.THE RMA’S MONETARY POLICY FRAMEWORK: A SCHEMATIC PRESENTATION PRICE STABILITY TARGET ACTUAL INFLATION BHUTAN PRICE STABILITY TARGET ACTUAL INFLATION INDIA EXCHANGE RATE TARGETING: *) INTERMEDIATE TARGET ONE-TO-ONE PEG BETWEEN THE BTN AND THE INR BHUTAN MONETARY POLICY IMPLI CATIONS FOR THE RMA Targeting the exchange rate implies the acceptance of India’s monetary policy. The system can be described as an informal Monetary (Currency) Union with India. the only realistic targeting method.

from August 1. deposit insurance schemes for the banking sector. the RMA has authorized all commercial banks to import and sell gold and silver bullion within Bhutan. RECENT ACTIVITIES AND DEVELOPMENTS • Developments in Currency and Foreign Exchange Management In a bit to streamline RMA’s core functions and to enhance the quality of service delivery to the public.2. and initiatives to counter the growing spread of pyramid/Ponzi schemes in the country. the Financial Services Bill was submitted to the National Council Secretariat in August 2010. The delegation of these functions also enables the RMA to focus on other operational efficiencies within the Currency Management and Foreign Exchange Departments. the RMA has delegated all foreign exchange processing and release operations to the banking sector. 2010. all commercial banks remain subject to periodical inspections and monthly reporting requirements. However. and allows for better time allocation towards the supervision and monitoring of the commercial banking sector. all commercial banks have been provided with adequate Indian Rupee working balances and supply of fresh Ngultrum notes to meet any public requirement. • The Financial Services Act (FSA) The Financial Services Bill was officially submitted to the National Assembly Secretariat in April 2010 for discussion and endorsement during the fifth National Assembly Session in June 2010. In turn. It is expected that the Bill will be enacted during 2011. the RMA has delegated the issue of all denominations of fresh Ngultrum notes in addition to the issue of Indian Rupee notes to the commercial banks. 2020. Thereafter. . from May 1. Meanwhile. Several of the key issues discussed during these meetings included Monetary policy actions. 2010. the review of the draft Financial Services Bill and the draft revised FDI Policy for Bhutan. facilitation of credit/debit cards in the country. discussions on inter-corporate borrowing and external commercial borrowing guidelines. OVERVIEW OF ORGANIZATIONAL DEVELOPMENT 2009/10 GOVERNANCE Seven meetings of the RMA’s Board of Directors were conducted during FY 2009/10. Other central issues discussed by the Board included the collaborative efforts with commercial banks towards the reduction of bank fees and service charges for public benefit. with effect from May 1. Similarly. strengthening Rupee management as a strategy for effective monetary operations.

salary tax. NECS Credit will be used to remit monthly provident fund contributions.• Developments in the Electronic Fund Transfer and Clearing System (EFTCS) On June 11. for faster deposit of these remittances. the RMA held the formal launch of the Electronic Fund Transfer and Clearing System (EFTCS). Under the EFTCS. and international organizations in Bhutan. and the refund of initial public offers for subscription of shares etc. National Electronic Clearing System (NECS Debit) and the National Electronic Funds Transfer System (NEFT). The Launch was attended by ACU Board Members. the transfer of money/funds from one account to another account takes place electronically. Procedural Guidelines etc. the accounts of individuals maintained with commercial banks shall be credited with amounts receivable by them from the company/organization on account of dividends. Lyonpo Wangdi Norbu. pensions etc. including representatives from the RGoB. Customers will now be able to transfer funds from an account maintained with ‘Bank A’ to another account maintained with ‘Bank B’. group insurance scheme. Subbarao. and loan repayments etc. The project is aimed at providing fast. salaries. additional transactions under NECS Credit such as payments of leave travel concession. In the near future. 2010. the inconveniences and delays associated with cash and other paper based transfer of funds such as cheques and drafts shall be greatly minimized.E. and Dr. Further. which was earlier not possible prior to the launching of the EFTCS Project. has been put in place to ensure that the payment system is safe and efficient. ‘Bank C’ or ‘Bank D’. And the necessary legal framework such as the Act. The EFTCS will in essence facilitate customers to transfer funds among the commercial banks. to facilitate the payment of salaries. the Bhutanese financial sector. With the introduction of this electronic mode of transfer of funds. coinciding with the inauguration ceremony of the 39th ACU Board of Directors meeting. The RMA with the technical assistance from the Reserve Bank of India (RBI) has implemented the EFTCS Project to strengthen the payment systems in Bhutan. H. disbursement of bonus. National Electronic Clearing System (Credit) Under NECS Credit. health contributions. shall also be included. Governor of the Reserve Bank of India. The launch held was inaugurated jointly by the Chairman of the RMA Board and Finance Minister. pension payments. The EFTCS Project consists of the National Electronic Clearing System (NECS Credit). include payments of salaries and dividends. . income tax refunds by the government. D. NECS Credit is used to channel credit to a large number of beneficiaries by raising a single debit to an account of the concerned company/organization. Types of transactions planned to be covered during the initial stage of implementation of the NECS Credit. In other words. Rules and Regulations. secure and efficient payment services to the general public.

In other words. National Electronic Funds Transfer The National Electronic Funds Transfer (NEFT) system is a nationwide funds transfer system to facilitate the transfer of funds from one bank branch to any other bank branch. electricity bill and the water bill). NECS Debit is used for raising multiple debits from a number of accounts of customers for crediting the account of a particular institution. funds can be transferred only between two parties. monthly rental charges for cable television. it shall be extended to rest of the country. user institutions and the banks: • • • • • • • Inconveniences and delays associated with cash and other paper based transfer of funds such as cheques and drafts shall be avoided. In other words. Since its inauguration in June 2010. payment of insurance premiums. under NEFT. Types of transactions planned to be covered during the initial stage of implementation of NECS Debit include the payments of utility bills (telephone bill. This provides safe and secure methods of payments. one institution to one individual. NEFT facilitates the transfer of funds from one individual to other individual. The Benefits of the Payment System The following are some of the benefits of using the EFTCS by individuals (customers).National Electronic Clearing System (Debit) Under NECS Debit. The user institution has to collect an authorization from the customer for raising such debit. It is a scheme under which an account holder with a bank can authorize the user institution to recover an amount by raising a debit in his account. shall also be included. the RMA has been joined by all other financial institutions. Administrative costs associated with the conventional methods of payments will be reduced to a great extent. as well as some of the key government ministries in . one institution to other institution. In the near future. The transfer of funds electronically from one branch of a bank to any branch of the other participating commercial banks in Bhutan shall be possible. fees for school/college/training institutions etc. The Receipts/payments of funds shall be faster. During the initial stage. Such authorization has to be endorsed by the bank maintaining the account of the customer. Thereafter. concentration is focused on the implementation of NECS Credit. During these first few months of the implementation of the Project. the project will be implemented in the capital city Thimphu. the account of an institution shall be credited by debiting money from the accounts of many customers. It will greatly improve the efficiency and provide better services to the general public. The reconciliation of accounts shall be immediate. loan repayments. additional transactions under NECS Debit such as subscriptions to initial public offers for the purchase of shares of companies.

. spearheaded by the RMA and in collaboration with the financial institutions. was conducted in the Chukha. South Africa. • Bhutan’s Commemorative Coins Commemorative coins issued by the RMA are minted by Singapore Mint and MDM Germany. 2010). Punakha. Paro. It is hoped that this will contribute towards enhancing the public’s understanding of the financial sector. Haa. Thimphu and Wangdue Phodrang districts during 2010 (March 15 – 24. including the 2010 FIFA World Cup. their rights as clients. The financial literacy program was supplemented with a live BBS TV program on March 16 and 17. • RMA Hosts the Asian Clearing Union Board of Directors Meeting The RMA hosted the 39th Meeting of the Asian Clearing Union (ACU) Board of Directors on June 11-12. with royalty payments to be paid to the RMA. The main objectives of the campaign were to educate the public at large on the financial services and products offered by the financial institutions. 2010. Historical. Implementation of NECS Debit and the NEFT on a mass scale shall also be carried out within the next several months. Celebratory or Religious” themes. The other two agreements were signed on December 1. and sell Bhutanese-theme based commemorative coins outside Bhutan. Efforts have been made to include additional user institutions under NECS Credit every month. with the World Coin Association (WCA) of the MDM Group. One agreement was signed on July 1. 2010 in Thimphu. to mint commemorative coins on various themes. the roles and responsibilities of the financial institutions. 2009 and December 15. During the FY 2009/10. Both the Singapore Mint and WCA of MDM have been allotted full rights to mint. the RMA entered into three agreements to produce three types of commemorative coins covering difference themes. Germany.transferring funds through the NECS Credit. 2009 with the Singapore Mint to mint a series of commemorative coins along “Cultural. market. and information on pyramid schemes. 2009. RMA Financial Literacy Program 2010 A Financial Literacy Education Program and Awareness Campaign. and in improving their skills to make sound financial decisions while avoiding predatory lending and credit scams. enabling viewers to call and clarify their queries.

Governor Tenzin is a graduate of Punjab University in India and holds a Post Graduate Diploma in Development Economics from the Australian National University. the RMA has been responsible for facilitating and implementing essential financial sector reforms ranging from the establishment of Bhutan’s first Credit Information Bureau to the formulation of critical legislation. Thereafter. healthy competition and vast innovations in financial services for the public and private sector. including the recently endorsed RMA Act 2010. Other plans in the near future include the endorsement of the Financial Services Act and revised Foreign Exchange Regulations that will pave the path for further opportunities within the financial sector and investment market.E. Daw Tenzin has enjoyed an illustrious career spanning 3 decades. one which the RMA remains ever ready and equipped to face. When Governor Daw Tenzin joined the RMA. the Central Bank was at a stage of tremendous institutional change and faced with enormous challenges associated with the extensive macroeconomic developments taking place in the Bhutanese economy. Daw Tenzin. before joining the Royal Monetary Authority as Managing Director in 2003. he was promoted to the post of Secretary of the Planning Commission in 2002. as the first Governor of Bhutan’s Central Bank and awarded him traditional ceremonial honors of both Patang and Kabney. 2010. ending his term at the Commission as Under Secretary in 1989. H. Next. His Majesty the King appointed RMA Managing Director. Ground-breaking work has been initiated through the Electronic Funds Transfer and Clearing System to enhance efficiency and safety in Bhutan’s payments and settlements system. but has also led the path for extensive and evolutionary changes in the Bhutanese economy to support financial sector development and stability. and launched the nation’s first Treasury Bills. . the RMA has not only made successful strides in its transition into a fully fledged and modern Central Bank. Balancing growth with financial sector soundness remains a looming and daunting challenge for the Central Bank. as well as timely financial sector liberalization that has promoted foreign investment. Similarly. In the last 7 years. He started his professional career as a Trainee Officer in the Planning Commission in 1980 and went on to serve 9 years there. the RMA has worked closely with the RGOB and the financial institutions to support reforms in the securities markets. Under his leadership. he served another 9 years as Under Secretary and Deputy Director at the Ministry of Communications before being appointed as the Joint Director of the Policy and Planning Division of the Ministry of Communications in 1999.The First Governor of the Royal Monetary Authority of Bhutan On August 18.

Mauritius. financial soundness indicators. Bangladesh. Vietnam.KNOWLEDGE MANAGEMENT During the fiscal year 2009/10. including the Seminar for Senior Bank Supervisors from Emerging Economies in Washington D. South Asian Capital Market Conference and Annual General Meeting of the SAFE. financial intelligence unit operations Credit information bureau policy and operations Currency management External debt management Financial literacy programs Financial safeguards at central banks Information Technology Legal framework for problem banks and resolving banking crisis Macroeconomic policy and management Microfinance policy Monetary and exchange rate policy Payments and settlements systems Regional economic and financial monitoring Remittances statistics Risk management for securities regulators Talent management and human resource development in central banks RMA officers also participated in several staff exchange attachment programs with international institutions. in addition to study visits to the Bangladesh Bank and the Thai National Credit Bureau. SAARC Finance Coordinators Meeting in Colombo. RMA officers attended organized seminars and trainings in the following macro policy and central-banking related areas: • • • • • • • • • • • • • • • • • • Anti-money laundering and combating the financing of terrorism Balance of payments and international investment position statistics Banking and non-bank supervision.C. the RMA was actively involved in national consultations organized by the Anti Corruption Commission. the RMA’s staff strength totaled 169. 160 employees were stationed at the Head Office. . Of this. as well as the National Statistical Bureau on national statistical development issues. SAARC Payments Council Meeting in Dhaka. Bank Negara Malaysia. the Ministry of Information and Communications on Information and Management Security Policy for the RGOB. Nepal Rastra Bank. consisting of 2 Executives. Mid to top management officials of the RMA attended various conferences. Sri Lanka. 72 Officers (43 percent of total) and 95 general support staff (57 percent). and the Conference on Post Crisis Growth and Poverty Reduction on Low-Income Asia in Hanoi. and the Reserve Bank of India. including the Asian Development Bank.. Gelephu and Mongar. bank fraud and detection. while 9 members were employed in Regional Clearing Houses located in Phuentsholing. STATUS OF STAFF As of June 2010. In-country.

Special Reserves is the accumulated earnings on the USD 60 million deposit placed by Kuwait Central Bank with the RMA since December 2006. This has offset to an extent. Revaluation Reserve. The Ministry of Finance’s revaluation reserve is an accumulation of a mix of realized and unrealized gains due to exchange rate changes in the past.217 million. Even though there was a net loss on revaluation during the year. Capital and Reserves consists of Paid-up Capital. The impact of the new Act on the RMA’s accounts is in the enhancement of authorized capital.4 billion last year to Nu. 2010 was carried out by Nag and Associates. As required by the new Act.38. India.4 million to Nu. there is a remaining balance of Nu.3. Factors that influenced the RMA’s annual accounts are summarized below. Due to appreciation of the Ngultrum against other major currencies during the year. a chartered accountancy firm from Kolkata. 1. LIABILITIES Total Liabilities of the RMA are made up of three major components: Capital and Reserves. The new act also prescribes a change in accounting for revaluation gains and losses. In order to comply with the Act these increases were made by transfers from the Ministry of Finance revaluation reserve account as prescribed in the Act. Section 16. the RMA’s Paid-up Capital has been increased from Nu. After these transfers. Foreign liabilities. the annual audit of the Authority’s accounts for the period ending June 30.3. paid up capital and general reserves. This category of liabilities grew by 3 percent. and Special reserves. This is a fund maintained by the government with the RMA.8 billion.1.7 billion during FY 2008/09 (referred to as 2009) to Nu. the Revaluation Reserve account balance has decreased from Nu.2 billion (Section 19).35.596 million. a).2. the growth in capital and reserves which would have been much higher due to enhancements. The balance in this account has now reached Nu.21. FY 2009/10 In accordance with Section 164 of the Royal Monetary Authority Act of Bhutan 2010. BALANCE SHEET The total assets and liabilities of the Authority grew by 7 percent from Nu.3 billion in FY 2009/10 (referred to as 2010).7 billion in the Ministry of Finance revaluation reserve account.660 million to Nu. As mentioned earlier. and Domestic liabilities. these increases were made by transfers from the Ministry of Finance revaluation account which had accumulated to Nu. and general reserves from Nu. . RMA ANNUAL AUDITED ACCOUNTS. there was sufficient balance in the revaluation reserve account to accommodate this loss and hence it did not affect the surplus of the year. General Reserve.800 million. A major development the past year has been the enactment of the revised RMA Act.

989 million during August and September 2009. ARC and Kuwait Central Bank. The growth in foreign assets in turn. INCOME AND EXPENDITURE The RMA’s main source of income is from the interest earned on its investments.2.2 billion in 2010. gratuity fund.73 percent as against 2.6 billion). 3. as well as currency in circulation (by 21 percent). total Domestic assets. government and government agencies’ FC accounts. In terms of growth. while the Authority’s interest expense continued to increase mainly on account of costs incurred on Indian Rupee (INR) Consists of dues to the IMF. MoF revaluation reserve. ADB. Domestic Liabilities4 grew by 11 percent from Nu. due to an increase in RMA’s balances maintained with the commercial banks.51 percent of 2009). In 2010. 3 . 65 percent was spent on interest payments. earnings on investments continued to fall (the average interest rate for 2010 was 1. with the remaining 22 percent being other operating expenses. debt securities issued. and partly due to the appreciation of the Ngultrum which resulted in reduced balances in Ngultrum terms.2. Foreign Liabilities of the RMA3 decreased by 3 percent from Nu. By nature.26 billion in 2010 (an increase of Nu.3 billion in 2010. repatriation of Asian Reinsurance Corporation (ARC) deposits. the movements in total assets were on account of developments in Foreign assets which grew by 6 percent.6 billion in 2009 to Nu. interest accrued but not due and other miscellaneous liabilities. Hong Kong branch by 186 percent. as well as an increase in investments at the Punjab National Bank. In 2010.583 million during the year. Accordingly. due to banks. RMA’s assets consist almost entirely of foreign assets in the form of deposits with banks abroad. RMA’s total income decreased by 28 percent while total operating expenses grew by 8 percent.3 billion in 2009 to Nu.4 billion in 2009 to Nu. due to government. GOI Stand-by credit facility and INR overdrafts. (which form a very small part of overall assets.8. This decrease was mainly due to the drawdown in Government Foreign Currency (FC) accounts.8. and consist mainly of balances with the commercial banks) increased by Nu. deposits of other foreign financial institutions such as the World Bank. from Nu. while on the expenditure side.35. ASSETS The total assets of the RMA comprises of Fixed assets. Meanwhile. just as its key expenditure is on interest on borrowings.23. 96 percent of its income was generated from interest earnings.37. This development was largely due to an increase in the balances of the government and the financial institutions. was mainly due to Special Drawing Rights (SDR) allocation by the IMF of SDR 5. and Domestic assets. followed by currency printing expense at 13 percent. Foreign assets. 4 Consists of notes and coins in circulation.

Moreover.9 million was transferred to the Special Reserve account. out of the total expenditure on policy instruments. Of the total surplus.226 million this year.38 million were on account of RMA Bills and Government Treasury bills. 48. the Ngultrum appreciated (Nu. Nu. The remaining surplus has been transferred to the Ministry of Finance upon approval of the final accounts by the Board. and Nu.505 million last year to Nu. Costs on Monetary Policy instruments Expenditures on monetary policy instruments (RMA Bills. which translated into lower earnings in Ngultrum terms.217 million.51/1 USD in 2009.54/1 USD in 2010) against major foreign currencies in line with the Indian rupee. bringing the total accumulation in this account to Nu. . interest income decreased by 27 percent while interest expenses increased by 7 percent. a growth of 11 percent. A combination of these unfavorable developments resulted in the surplus falling by 55 percent from Nu. 46.189 million was incurred on account of INR borrowings. To elaborate.borrowings in the form of the GOI Stand-by Credit facility and Overdraft from the State Bank of India (SBI).33. Interest expenses on INR borrowings grew by 88 percent during 2010 compared to 2009. Nu. increased from Nu. approximately Nu.228 million in 2010. Government Treasury bills).205 million in 2009 to Nu. In 2010.

III. STATISTICAL SECTION .

1.1. Hotel and restaurant 8. and forestry 1.3.6 7963 4728 3235 276 1704 61223 11.7 4.3 4.2.3 Forestry and logging 2.4 7292 3192 2163 1938 581 2087 2616 5021 1447 135 2626 1949 1027 922 3664 2778 886 124 920 28461 9. Construction 6. Mining and quarrying 3. Plus: taxes net of subsidies Gross Domestic Product 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 5290 2516 1468 1305 315 1619 2255 2761 882 88 1800 1392 761 631 2814 1779 1035 96 424 19736 5735 2682 1628 1425 422 1880 2279 3818 1045 113 2083 1532 886 645 3037 2262 775 101 480 22526 6554 3000 1677 1877 457 1938 2658 4711 1283 120 2452 1559 842 716 3342 2556 786 111 815 26000 15.6 10078 5061 2625 2393 1252 4593 11521 6251 2695 569 5366 4577 3174 1374 28.1 Agriculture proper 1. 2009.7 5.2 5930 3763 2168 268 1613 54713 10.9 18.9 9. Community.9 8066 3685 2261 2120 550 2571 3635 6219 2089 212 3891 2918 1810 1109 4472 3120 1352 172 1318 36112 15.8 8. insurance .7 14. Finance & Insurance 9.7 2.2.TABLE 1.4 8707 3926 2467 2315 878 3098 5340 6020 2317 301 4095 3473 2294 1179 4895 3221 1674 213 1338 40674 12. .5 2.8 100.6 11159 5668 2895 2596 1392 5017 11816 7470 2935 538 5990 4962 3466 1460 35. personal & recreational services 12. Transport.5 7524 3481 1991 2052 440 2297 2635 5741 1726 169 3295 2280 1279 1001 3823 2637 1186 144 1211 31285 9. Manufacturing 4. Discrepancies in the figures are due to rounding. storage.8 0.1 13. Wholesale and retail trade 7. Business services 10.6 9234 4377 2531 2326 890 4033 10082 6781 2497 368 4469 4105 2802 1297 6. Public Administration 10. social services 10. National Statistics Bureau.3 0. livestock. Real estate & dwelings 9. Private social.3 12.2 Livestock 1. Electricity and water 5.5 5312 3370 1942 242 1443 49456 21.0 GDP Growth rate (%) 7. Education and health 11.1 5. real estate & Business services 9.2 4. Financing. Agriculture.0 7.2 9.2 2. GROSS DOMESTIC PRODUCT BY KIND OF ACTIVITY AT CURRENT PRICES Millions of Ngultrum Year Share of GDP in 2009 (%) Sector 1.1 Source: National Accounts Statistics.2 19.4 0. and communication 9.3 8.

9 28.9 -2.2 -12. insurance .9 -6. Mining and quarrying 3.1 Agriculture proper 1.6 20. personal & recreational services 12.1. Finance.9 -0.2.2 Livestock 1. National Statistics Bureau. and forestry 1. Electricity & water 5. Manufacturing 4.8 6246 2942 1812 1493 650 3087 8061 4466 1976 264 3083 3282 2505 772 5 4037 2562 1476 178 1059 36389 17. Private social. Education and health 11.2 6.3 Business services 10.7 2. storage.7 GDP Growth rate (%) 7.2 Source: National Accounts Statistics.8 5854 2766 1642 1446 402 1967 2332 4449 1378 129 2007 1771 1080 691 3386 2568 720 114 802 24591 4. Discrepancies in the figures are due to rounding. Plus taxes on products less subsidies Gross Domestic Product 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 5290 2516 1468 1305 315 1619 2255 2761 882 88 1800 1392 761 631 2814 1779 1035 96 424 19736 5570 2617 1609 1345 370 1821 2186 3461 1029 112 1844 1471 874 597 2937 2188 660 99 453 21352 5727 2689 1637 1401 407 1855 2561 4329 1234 115 2000 1427 878 549 3154 2412 639 103 738 23650 10.1.TABLE 2. Hotels and restaurants 8. Real estate & dwellings 9. Construction 6.0 5982 2824 1649 1509 381 2055 2552 4820 1633 157 2448 1991 1292 699 3379 2330 1048 127 1025 26550 8.Community.8 6196 2898 1765 1533 531 2469 4312 4248 1901 246 2857 3005 2285 720 3912 2574 1338 167 1014 30857 6.2 8.7 6458 3064 1864 1529 726 3580 8893 4672 2116 335 3547 3661 2824 814 24 5350 3179 2171 191 1121 40651 6. Transport. Wholesale and retail trade 7. .3 Forestry and logging 2.0 6043 2861 1728 1455 447 2214 3259 4701 1878 186 2661 2554 1846 708 3753 2618 1134 144 1039 28879 8. social services 10.6 6.5 6. Public Administration 10. Agriculture. Finance & Insurance 9.2 6. 2009.7 2.9 6.2 2. and communication 9.9 6291 2997 1821 1472 780 3349 9110 4010 1993 385 3247 3447 2645 783 20 4161 2640 1521 187 1128 38088 4.8 1.4 3.8 3.4 42.9 20.4 16. GROSS DOMESTIC PRODUCT BY KIND OF ACTIVITY IN 2000 PRICES Millions of Ngultrum Year Growth from 2008 to 2009(%) Sector 1. real estate & Business services 9.9 9.2. livestock.

8 89.4 54.6 1877.8 31.8 33.2 418.6 108.3 0.1 37.0 18.7 199.7 0.0 66.1 0.8 71.3 4.6 0.7 0.0 13.3 759.1 26.0 132.0 253.9 540.3 228.2 413.6 213.0 16.0 278.0 226.6 28.1 0.5 447.8 0.4 233.3 675.4 47.9 75.2 712.8 1327.0 92.2 59.8 11.4 69.5 0.6 448.4 40.5 25.1 781.0 26.3 2.3 2.9 316.9 509.7 0.4 12.1 145.5 1097.0 60.8 10.0 0.0 37.6 1.3 203.8 20.4 166.6 3.4 0.9 18.5 703.5 0.0 22.1 18.6 896.4 1784.2 0.6 381.9 18.0 586.7 56.4 111.5 704.0 327.7 0.2 586.0 56.8 80.6 39.3 111.3 394.2 72.4 687.8 851.9 4.3 188.5 912.6 1.0 14.5 20.9 21.5 0.3 21.9 1392.0 5.7 474.4 255.5 0.8 265.5 315.8 38.66 1.1 255.8 161.1 0.8 0.1 1382.4 765.6 840.0 5.9 3.TABLE 3.8 301.4 25.2 731.4 560.7 297.0 302.9 413.0 26.86 760.8 134.9 174.0 29.3 66.7 283.7 46.3 5.0 6.5 279.8 8.2 0.7 0.6 317.2 1.7 240.2 21.10 60.0 577.0 283.8 1359.5 35.6 1106.2 24.1 18.6 288. Exports to India Exports to Countries other than India Sales within Bhutan 255.4 0.9 2.7 55.9 0.2 0.7 0.8 0.0 16.0 56.2 5.7 79.7 0.7 236.2 1663.0 76.7 201.3   .7 9.9 14.9 503.6 491.3 5.5 120.3 0.6 714.9 0.2 148.0 324.2 339.7 305.0 84.8 707. SALES OF MAJOR INDUSTRIES Millions of Ngultrum Period 2010 2000 Industry (1) Army Welfare Project Exports to India Exports to Countries other than India Sales within Bhutan (2) Bhutan Board Products Limited Exports to India Exports to Countries other than India Sales within Bhutan (3) Bhutan Carbide & Chemicals Ltd.0 16.9 814.0 8.7 4.8 10.9 0. Exports to India Exports to Countries other than India Sales within Bhutan (4) Bhutan Fruit Products Limited Exports to India Exports to Countries other than India Sales within Bhutan (5) Bhutan Polythene Company Exports to India Exports to Countries other than India(*) Sales within Bhutan (6) Penden Cement Authority Ltd.7 659.0 84.2 696.6 13.7 641.2 521.4 28.0 277.9 11.3 258.0 20.4 807.9 17.0 53.0 13.0 213.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 I 141.0 96.8 426.3 763.8 294.5 59.4 0.0 108.0 47.7 11.8 133.0 483.8 0.1 556.62 332.0 328.5 7.0 460.3 II 95.7 2.1 190.0 209.1 254.0 280.2 169.0 0.9 4.0 224.0 528.0 215.0 134.0 27.4 98.7 397.2 400.6 87.4 122.3 0.8 74.4 6.4 237.7 108.1 546.0 68.0 55.8 46.2 7.3 1652.9 1.1 0.9 0.5 1158.0 2.8 325.9 107.3 0.

7 167.7 992.5 32.6 45.7 0.4 57.6 180.2 34.4 50.5 82.5 285.5 105.2 10.9 643.5 2.0 45.6 118.1 1024.2 11.0 17.0 38.4 8.5 104.2 2001 2002 2003 2004 2005 2006 2007 2008 2009 I 491.0 658.9 11.9 130.9 39.6 51.4 0.7 6459.6 3407.2 134.3 41.3 52.5 7179.8 133.5 1898.5 40.1 110.7 151.0 0.7 973.2 643.5 16.0 79.3 8.9 44.5 1578.1 10.9 2.2 40.1 20.8 21. -(4) Processed vegetables and fruits.9 6.1 26.7 7.0 27.5 456.8 87.1 748.6 12.0 0.0 28.8 0.6 0.0 0.6 23.2 0.4 1825.3 34.2 94.0 0.7 65.3 6.-(6)Cement.6 8. Exports to India Exports to Countries other than India Sales within Bhutan (10) Druk Satair Corporation Limited Exports to India Exports to Countries other than India Sales within Bhutan (11) Druk Plaster & Chemicals Limited Exports to India Exports to Countries other than India Sales within Bhutan 428.2 2.-(7) Ferro Silicon.(-) data not available -(1) Alcoholic beverages.3 0.7 83.5 8.7 13.7 11.7 118.4 2253.8 20.7 48.7 106.7 13.1 29.2 14.7 338.4 223.4 22.3 74.5 8.3 50. CONTINUED Millions of Ngultrum Period 2010 2000 Industry (7) Bhutan Ferro Alloys Limited Exports to India Exports to Countries other than India Sales within Bhutan (8) Bhutan Agro Industries Limited Exports to India Exports to Countries other than India Sales within Bhutan (9) S.5 47.0 33.7 90.7 344.8 12.2 34.5 42.9 65.0 39.0 0.9 0.2 1857. -(3) Calcium carbide.4 2.8 94.0 4900.8 197.2 2065.2 0.8 63.9 2.5 1391.2 68.3 38.0 83. (*) Deemed export.1 6459.0 0.4 1929.1 35.3 2445.9 579.3 2.4 1461.2 643.2 49.3 473.4 19.3 48.8 0.0 5.2 83.5 0.2 0.3 15.4 94.5 6.5 26.7 68.0 651.0 76.6 801.9 2944.3 1.4 1986.3 712.9 3022.9 4.0 31.4 112.8 1213.   .6 502.7 0.3 31.9 1454.TABLE 3.1 1155.6 26.0 5.D.0 0.5 43.6 222. -(5) High Density Polythene (HDPE) Pipe.5 14.0 0.8 1089.0 203.7 71.7 47.1 6.6 4220.2 27.5 1711.1 0.2 II 508.5 573. . -(2) Particle boards.2 1886.5 0.6 194.1 Source : Respective Industry.2 258.2 98.6 140.8 1813.9 51.0 8.1 172.9 24.4 6.3 468.4 40.0 8.4 1432.7 18.5 76.5 0.7 8.7 141.1 28.1 26.4 68.7 2.9 37.5 102.4 337.4 428.1 TOTAL Exports to India Exports to Countries other than India Sales within Bhutan 2446.7 18. SALES OF MAJOR INDUSTRIES.3 12.9 1.2 34.5 41.0 3.7 8.7 3.1 64.6 7.3 0. -(10) Gypsum dust & Gypsum boulders.2 119.5 2.8 3000.1 658.9 3.0 579. Eastern Bhutan Coal Company Ltd.0 115.5 110.8 1707.9 14.6 8.2 678.0 19.6 21.5 1942.7 242.8 399.4 2854.9 0.9 3.4 57.9 33.7 22.7 81.5 77.4 126.7 921.4 49.2 14.9 0.8 5628.5 10.3 658.1 127.7 18.3 47.8 3476.3 18.6 4907.1 13.-(8) Processed vegetables and fruits -(9) Coal .1 0.2 36.9 13.5 0.

8) (7.6 2008 8.9) (61.307.9 76.7 55.3 (12.0 1.8 1.7 17.7 85.581.2 381.9 52.8 1.2 (0.827.4 39.2) 3.807.6 (5.9) 7.9 130.592.6 (25.3) 435.3 1.4 69.5 24.6 1.1 (3.1 86.978.4 Basochu 325.4 8.3 277.2 6.9) (15.5 605.75 per unit for KHPCL.7) (79.6 (6.5 9.2) (2.0) (20.2) (2.6 53.4 0.8 0.9 134.5 25.3 Percentage change on the previous year 2005 22.7) 2007 97.795.2 16.1 (14.3 583.4 17.9 (0.908.7 14.9) Feb (24.885.3) (2.7 4.4) Jun (31.015.8 399.7 1.9 18.3 159.4 388.3) 2.5) Sep (6.0 584.8 (2.9) (4.1 157.9 41.8) (0.0) (2.8 (21.8 21.7) (27.9 537.revised from Nu.6 287.6 48.7 13.7) (60.2) (37.8 82.7 29.0 22.7) (79.8 10.3 1.4 30.1 234.1 19.2 (4.0 (4.5 69.2 529.8 406.9 16.4 23.9) (0.8 6.0 Nov 1.780.9) (0.5 603.7 329.6 2.7 0.4 30.3 7.6 392.9 582.3 10.7 71.959.4 103.4 0.1 6.0) 39.3 161.7) (19.749.1) 2006 47.7 23.5 3.1 52.3 14.7 (2.8) (42.5 (1.8 2009 (7.8 28.3 21.2 78.3 355.7 372.4) (9.4 397.6 16.8 243.3 32. 1. Nu.2) 14.1.0) 570.9 672.7 17.1 6.5) (10.9 177.062.7 (7.749.9 12.4 535.8 5.154.3 23.098.6) May 48.4 839.8 546.4 (24.4 48.2 (2.0 (9.6) (11.7 168.4 1.1 4.1 9.9 12.4 553.5 77.4 11.4 99.073.3 27.3 6.8 Total 586.1 3.1) (1.748.6 19.0 261.1 133.4 686.7 4.9 54.8 44.3) (85.072.5) 54.7 12.2) (84.2 per unit.7) (1. Nu.991.1) 8.5) 17.3 53.3 11.8 14.1 185.4) Oct 10.3) Aug (1.1 575.7 1.5 74.5 68.5 24.7 (18.9 269.0 4.1 166.8) 30.5 8.6) (79.3) (2.6 (4.9 103.1 36.2 (13.8 Tala 61.8 7.282.2 (21.8 (4.7 17. KHPCL.0 3.2 13. 2 per unit for CHPCL .3 22.5) (0.994.363.5 50.9) (73.5 49.0 2.0) (69.3 per unit for 15% of energy sold with the remaining 85% at Nu.7 14.1 22.6 50.2 9.7 23.0 101.0 518.7) 10.3 205.1) (24.1 0.8 20.2 per unit for BHPCL sales to Chukha effective from July 2005 (2) Power tariff for export to India: Nu.4 (8.032.3 8.4 (45.5 10.9 58.7 375.912.5 130.0 561.5) 4.3 32.7 476.5 17. .5 Source: BHPCL.TABLE 4.113.4 7.0.7 6.0 960.7 50.034.1) (56.5 10.6 25.9 576.5 3.1.8) (9.0 392.9) (1.0 (46.1 (9.1 76.2 per unit (Domestic sales of KHPCL are exclusive of demand charges).3 397.7) (1.9 3.6 6. (1) Power tariff for domestic sales: Nu.0 75. Tala sales are at Nu.666.8 120.2 381. THPA.194.6 23.4 103.0 59.9 41.7 (39.6 (31.1 546.1 (2.9 54.1 Domestic Sales (1 ) Basochu Chukha Kurichhu 325.6 52.9 3.5 523.4) 38.3 1.5 15.9 3.2 699.5) 18.1 Jun 78.8 101.9) 35.2 28.4) Apr (82.3 526.8) (31.0 4.3 14.2 15.8 per unit for THPA.6 112.0) (80.0) 15.7 547.9 152.4) 8.6) (4.9) 14.0) 15.4 16.4 (4.0 307.5 17.6 (47.3 66.3) 35.1 1.6 34.164.5 per unit with effect from Jan. 1.7) (27.0) 23.6 46.3 5.1 53.9 398.8 19.6 12.7) 6.5 14.4) (63.5 995.5 5.4) (0.3 27.3 per unit for CHPCL & KHPCL.385.1 29.9 29.0 (33.4 (1.3 100.6 6.001.7 17.4 604.2 14.7 9.7 154.8) (5.5 14.4 54.8 73.9 29.0 227.8) 31.1) 10.7 5.4) (11.0) 7.8 81.0 (2.8 36.4 7.022.1) 20. 2007 KHPCL has also started selling power for industrial use at Nu. 1.0 0.1 177.727.7 12.8 235.5 14.3 Exports (2) Chukha Kurichhu 2.2) (9.8 306.9 94.7) 39.2) 0.5 19.3 15.7 20.3 33.8 69.2 6.2 37.7 Tala 1.9 68.4) Mar 12.1) 5.8 (0.7 60.9) (14.5 511.6 Total 3.5 50.0) (9.4 388.3) Jul (13.6 57.6 1.649.2 1.2 156.1 7.2 10.0 99.0) 29. SALES OF MAJOR POWER PROJECTS Millions of Ngultrum Period 2005 2006 2007 2008 2009 Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 3.7 (27.6 3.2 17.3) (19.8) (12.5) 14.4) (39. Since Feb.8 146.4 81.459.2) (7.0 8.7 372.8 1.6 (8. CHPCL.0 19.7 3.7) (13.5 28.6 53.1 349.6 (9.3 33.198.7) Dec (10.2) (1.0 16.4 12.4 52.0 10.9 15.9) (86.7 4.9) 2010 Jan (18.0 94.4 67.3) 0.4 26.1 312.0 23.4) (0.4 58. Nu.6 131.341.5 60.290.9 398. 2005.9 55.6 1.6 34.2 3.9 1.1 813.1) (4.4 247.7) (11.9 26. 0.047.0 82.7 22.7 60.5 (13.1 (0.8) (78.8 45.9 919.7 13.4) (23.9 81.0 14.2 27.441.2) 9.6 397. 1.1 (2.6 62.129.8 21.6 321.5 (48.8 10.8 Total Sales Chukha Kurichhu 2.5) (4.3 162.665.9 Tala 1.6) (10.7 22.6 505.1 173.7) 492.6 10.1) (67.2 25.5 3.2) 6.6 57.7 13.9 29.1) 6.8) 0.9 (11.1) (84.2) 45.0 852.724.9 65.4) 55.6 35.1 20.

7 Revenue Number 3.0 1.3 8.0 1.0 6.6 4.6 2.5 1.4 5.4 2.5 5.8 1.9 0.6 1. Revenue: Gross revenues are inclusive of tour operators' revenue and government tax.8 3.6 1.0 1085 1386 2428 11478 6162 4126 1190 27636 2009 2010 Revenue 7.5 1.8 2.2 0.6 2.8 0.7 0.1 4.7 1.2 0.7 5.7 0.3 4.9 3794 441 814 2539 4291 2666 1045 580 4673.4 4.4 29.0 8.4 0.4 2.5 2325 412 532 1381 4765 3344 999 422 3537 454 896 2187 6715 3777 2084 854 17342 Revenue Number 2.1 1.4 Source : Department of Tourism.0 588 1133 2952 8336 4512 2733 1091 21094 Revenue Number 7.1 0.5 6.1 0.7 0.9 5.3 12.4 0.3 0.9 6.5 1.2 5.6 18.9 0.8 6.4 3.1 6.4 4.9 4.9 2008 Number 5355 532 1311 3512 5904 3173 1862 869 4899.5 38.4 0.5 0.2 0.9 0.9 0.9 3.2 0.2 31.0 3.8 3662 667 811 2184 6770 4263 1743 764 5098 858 1220 3020 7950 4326 2607 1017 23480 Revenue Number 4.0 1.1 7.3 4.1 0.3 4. (*) Convertible currency paying tourists.3 9.6 0.9 11278 5719 552 1358 3809 5559 3059 1747 753 14.1 17. .5 1.7 11.5 1.TABLE 5.9 3.0 4.1 2.5 2.3 7.5 2.7 7.4 1.1 0.9 0. TOURIST ARRIVALS AND REVENUES (*) Number of Tourists and Revenues in Millions of US Dollars Period 2005 Number Q1 Jan Feb Mar Q2 Apr May Jun Q3 July Aug Sep Q4 Oct Nov Dec Total 3131 334 631 2166 2489 1474 700 315 2538 274 576 1688 5468 3412 1443 613 13626 2006 2007 Revenue 5.7 3.9 6.7 6.8 23.3 9.

2 -834.5 -1499.3 -3633.3 610.0 11880.3 30356.0 -7417.7 17313.9 13254.8 18806.0 47866.8 33573.3 -4490.3 13479.7 13227.3 20965.8 -4047.7 36865.3 19339.8 13029.4 13253.7 966.7 25202.1 1719.4 363.5 22147.2 658.5 1134.0 -4122.3 142.5 -1731.2 637. Total (Net) 587.6 3855.0 406.4 2949.4 342.5 Rupee 3711.5 1107.3 78.0 26455.5 50.0 1054.4 15050.3 49360.0 25.0 38274.4 -3417.2 13896.5 37381.6 23414.3 1133.8 -3166.8 49.4 17670.5 38307.9 1107.9 11809.7 18350.8 19759.3 39727.0 637.8 380.7 561.5 Claims on Private Sector 1624.2 429.9 36332.1 9112.0 1054.4 14066.0 1168.2 252.7 29650.5 36524.4 -1842.3 48807.6 26177.0 49894.3 49048.3 Claims on Joint Corps.3 53769.1 37999.5 -1159.8 34044.4 -4526.7 14823.7 38793.3 -5494.1 17157.3 574.3 13812.2 3405.2 356.0 1110.3 13950.5 36758.3 36760.3 -2486.0 1054.6 58373. 126.0 586.7 3.4 -1669.7 21678.6 4779.6 38107.4 24458.5 354.9 35293.1 414.4 15308.2 551.2 2450.4 27888.0 35538.0 1114.8 406.7 14058.6 23949.0 19675.1 46998.4 23863.7 555.3 -1495.8 1282.0 50815.4 13073.8 1062.7 11.7 -2955.2 537.7 35248.9 362.7 607.6 15732.2 612.3 11528.6 Claims on NMFIs 3.7 3031.3 -2715.2 33939.1 -3071.9 5446.1 13683.8 17327.4 36081.7 25227.8 24049.7 355.5 57965.7 26365.5 46906.2 -3258.2 -4193.5 616.2 1107.7 567.0 -936.7 20252.0 16312.6 52227.7 3.5 -1354.3 319. MONETARY SURVEY Millions of Ngultrum Assets Foreign Assets(Net) Convertible Foreign Currency 11362.2 33537.0 27200.3 609.4 6461.6 -2612.1 10714.4 49.1 16064.2 12736.1 27074.4 -4.4 32940.1 1054.4 35366.0 24974.0 1102.3 2308.1 48502.7 -2264.9 27846.8 17719.8 383.0 -1939.8 16589.1 20573.9 16607.4 32798.9 36525.0 26809.0 36648.3 -2251.7 34238.2 1133.5 -5453.1 37646.7 1143.6 -2232.7 117.5 35187.5 3711.8 109.0 -2563.7 577.3 26772.0 -1434.1 10824.2 -3239.7 18632.6 8658.2 635.3 616.1 18397.7 -5869.1 14053.6 25682.6 16733.0 238.3 17303.5 13362.9 53251.7 -2692.5 23136.9 -4518.3 35364.2 59655.7 356.2 359.9 34914.4 50.8 1188.5 20639.7 4963.5 19769.5 11418.7 39749.5 -3471.6 1076.8 1228.4   .6 1308.0 16267.9 2295.5 24541.7 32610.2 11301.0 1106.5 36542.6 1110.9 38706.0 3362.2 1154.6 315.5 50.3 25720.2 -999.0 56324.8 Claims on Govt.6 50.0 3575.8 39075.9 -1124.8 1141.3 21369.0 4024.9 561.5 -1392.2 37400.4 609.9 -2035.0 20754.7 -455.3 25222.8 17712.2 30118.3 1475.7 1273.8 18169.8 -4581.1 -3165.6 5718.1 -4204.4 41122.0 33286.7 11.5 37642.7 561.1 610. Corps.0 3.6 50.3 12624.9 -530.2 349.7 352.6 -3850.5 57425.5 7.2 355.2 40294.5 1204.5 3786.TABLE 6.0 -353.5 12855.6 -1784.7 40407.8 14944.4 19905.4 -1255.7 16802.3 1325.9 15731.1 4567.4 36229.8 609.1 37773.7 766.3 570.5 610.9 568.0 5403.8 607.8 177.0 400.7 20165.3 330.9 5601.1 57045.0 1054.4 1181.6 36168.9 14174.9 14489.2 Domestic Credit Claims on Govt.7 33074.6 17860.1 33009.2 16617.4 365. 332.9 17540.1 14724.0 24425.3 361.5 23045.3 2532.6 -1590.7 1108.4 -3070.2 25195.1 135.3 57402.3 1489.7 48659.0 Total 15073.5 38602.5 35011.4 117.3 33350.4 561.0 561.7 565.7 3471.2 35236.8 415.9 1111.1 1184.4 -888.2 246.2 44531.2 End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 15661.2 746.8 1151.3 1268.8 227.5 7673.0 58315.2 17495.6 285.2 40352.

1 28620.7 4980.0 1586.1 5386.5 2669.3 18503.8 12831.0 20618.0 0.0 0.0 35.2 11.2 4168.3 39727.0 18487.6 15993.4 2347.8 746.2 13700.4 16989.3 30680.1 5103.6 12448.1 8831.2 44531.8 20630.0 16312.7 28863.4 32797.0 58315.3 15342.9 1765.7 29650.4 --------6769.4 16573.1 8202.9 16302.8 35176.3 43862.0 0.8 3839.7 48659.4 9847.9 15100.1 3708.0 0.8 16598.6 15151.4 23756.2 59655.0 39473.3 5867.1 13875.0 0.2 4325.0 0.8 11410.0 14335.0 0.0 49894.2 14697.0 0.8 8053.9 1648.6 1609.0 --------6319.4 17474.5 13130.1 3690.9 38706.9 586.1 1913.9 14053.0 0.5 57425.3 15040.6 52227.5 6366.8 --------4967.3 12689.9 19127.2 21.8 4454.9 22115.9 22537.5 3229.3 22. a major reclassification has been carried out in the accounts of all the   economic sectors.3 31384.7 18159.0 14274.2 14867.8 18373.4 31415.7 16024.5 57965.1 1204.6 12613.0 Total 10035.0 50815.8 0.9 14245.4 624.5 32915.4 10195.0 0.0 35.5 13669.9 20163.6 58373.2 13809.7 6179.0 0.5 15764.2 40352.4 16627.3 1969.9 32113.4 14392.9 4579.4 5505.5 46906.4 41778.7 Total 4039.2 -470.9 12394.0 15808.0 0.7 21240.9 3640.0 25780.4 43294.8 3559.0 20409.2 14980.4 2000.0 0.0 5066.8 10702.5 20479.3 1765.2 26835.8 14648.0 17048.0 0.7 16233.2 32100.4 Other Items (Net) 5510.3 15796.3 49360. .8 41248.0 18401.0 0.1 25727.9 16357.5 13401.9 23564.0 0.0 0.3 49048.2 13833.9 3672.7 QuasiMoney 5996.1 19447.0 0.9 43728.8 9167.1 57045.0 5078.6 3372.5 38602.7 15527.2 4307.5 5983.5 4349.1 9958.6 950.7 629.7 40407.2 10797.7 38793.0 End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 15661.2 18780.6 16891.1 15809.1 11026.0 16110.5 16405.0 0.9 586.5 12955.0 0.4 13505.5 18569.1 42534.9 14053.7 3314.7 3347.4 41122.7 11550.0 -470.2 629.2 5322.8 14756.7 5392.1 3824.1 3492.7 12553.2 12361.3 2000.4 16173.3 48807.TABLE 6.1 16421.8 15698.1 1585.5 3238.9 44714.0 1913.9 4855.0 1.0 4934.6 6732.7 --------13846.0 13722.0 0.8 10625.9 11609.4 1254.3 53769.9 624.9 10751.9 53251.2 26830.0 14425.0 0.8 20577.1 33244.0 0.5 18123.1 23043.0 0.3 --------0.4 10802.9 790.8 --------20165.2 24671.3 3831.8 12824.4 172.3 3518.1 --------0.4 26696.6 10096.2 100. CONTINUED MONETARY SURVEY Millions of Ngultrum Liabilities Broad Money(M2) Money(M1.3 2070.1 8545.2 -470.3 11571.5 23045.6 18699.9 12315.3 35.0 0.3 --------1802.0 0.0 0.0 1000.2 32225.1 6565.2 20197.5 12118.8 13527.7 22622.9 12995.3 14905.2 9790.0 15439.4 16204.9 14392.6 4540.1 48502.8 3780.2 11388.0 4879.6 20957.7 2404.3 57402.5 7143.3 26772.0 0. Narrow Money) Currency NMFI Outside Demand Banks Deposits Deposits 1269.0 0.1 20419.0 16599.7 9599.9 33.Data prior to 2003 cannot always be directly compared with the subsequent data.3 13164.7 20252.0 0.5 32159.3 5.0 Money Market Instrument (Govt T Bill) 115.9 1278.0 56324.1 10626.0 47866.1 14133.8 19275.2 33537.2 15346.8 27670.6 4920.2 14521.0 *)Starting from January 2003 onwards.0 17642.7 8969.6 20113.0 0.7 36719.3 16018.1 46998.5 36524.3 --------7076.0 86.3 5356.9 16961.0 0.8 17151. because of a break in continuity.0 0.9 33405.3 41824.6 17271.7 767.3 18458.5 6444.5 14144.4 2762.4 16349.0 0.5 19241.1 9032.9 12678.6 22716.1 13739.

0 0.9 1455.3 35900.1 24706.8 37148.9 31814.0 127.7 32176.6 26532.1 16.0 0.0 0.8 30591.5 1157.0 13000.5 1157.0 0.9 26371.3 35793.2 86.0 --------0.0 0.9 --------1.6 2755.0 0.8 35899.8 26061.0 0.0 0.1 16.0 End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 11253.5 15.0 0.6 101.4 17.0 53.2 39281.8 37366.8 1682.0 0.0 0.0 32035.4 39100.0 0.6 36034.0 0.8 106.0 0.8 0.7 17.0 0.4 39468.0 0.9 36836.5 102.5 33743.0 0.7 16.7 33727.3 36.4 18510.0 0.2 13933.0 0.3 1630.7 25894.4 34932.7 1688.7 339.0 34978.9 142.1 24328.8 22653.4 47.0 0.0 0.0 0.0 15.7 39296.0 35258.0 0.5 23456.7 2291.2 194.7 10290.9 13.4 --------987.3 33867.5 1157.0 0.0 0.5 1.7 25986.0 0.0 0.0 126.4 35001.MONEY AND BANKING STATISTICS Millions of Ngultrum Assets Foreign Assets Convertible Foreign Total Rupee Currency 10357.8 112.0 0.5 17.2 90.2 110.7 246.1 14.3 103.0 25949.0 0.0 0.2 33797.2 66.4 3830.9 18197.3 111.0 0.3   .2 37066.0 0.2 16.1 26612.9 23071.3 633.9 35683.6 563.3 37060.0 0.4 32530.1 138.7 14.0 96. 0.0 17.0 0.0 33636.0 0.0 0.3 --------10911.8 18.0 0.2 36948.0 35756.0 0.0 0.7 81.0 1157.0 0.2 23950.0 1243.5 1157.6 2539.0 0.6 1085.3 10269.2 24014.6 11085.9 35685.7 15.0 0.9 1.8 16.7 35981.5 9.0 0.5 44.1 157.8 9500.0 0.8 1215.4 33680.6 18220.7 0.1 37269.9 37140.5 170.0 22105.7 137.9 35296.0 37.7 22429.6 114.0 0.4 35259.0 0.5 37277.8 115.0 0.8 457.5 384.4 127.5 17351.6 18397.2 25839.0 0.2 134.1 36361.0 0.0 0.0 35116.0 0.9 17.9 35451.7 200.0 0.6 37315.0 17.9 118.0 0.0 0.0 0.9 12260.3 --------303.8 2554.4 120.1 16.0 Claims on NonMonetary Financial Government Institutions Securities 0.3 15.0 0.0 0.0 33543.0 0.3 16.0 0.0 223.0 0.1 16.0 0.0 0.7 --------11899.4 140.7 25431.5 11.9 14811.0 100.0 26034.2 12.0 0.0 0.2 1243.8 37514.4 426.4 17.0 0.0 0.0 0.5 179.0 0.3 33608.0 0.7 24659.9 17.4 768.2 32396.0 0.8 37199.0 0.0 0.6 33503.0 0.0 0.0 0.1 28908.0 0.3 24.7 34718.1 24202.0 17.8 23894.8 181.0 0.0 --------56.0 0.3 35380.2 26912.3 121.5 895.8 33768.3 1001.4 27050.8 35638.6 26179.2 146.1 177.5 27335. ROYAL MONETARY AUTHORITY OF BHUTAN .5 36409.0 0.6 Claims on Govt.0 0.0 0.4 87.2 429.0 0.0 0.2 191.3 31345.5 11.3 36374.1 Claims on Deposit Money Banks 892.6 37928.TABLE 7.8 67.5 3416.1 11998.6 10716.0 0.0 0.0 0.2 12321.0 0.2 31608.7 32485.0 0.0 0.0 0.0 0.5 913.9 35234.2 79.9 33490.7 293.3 32634.5 0.0 0.0 0.6 52.3 2709.8 16.5 1157.0 0.0 0.0 0.9 27495.0 0.5 33566.0 Claims on Private Sector 3.0 0.9 11.1 36492.8 11011.6 34923.6 1181.0 118.0 0.4 35508.0 0.0 16.

1 --------8281.8 4581.0 0.6 9406.1 956.8 1351.0 1000.9 14794.0 2400.1 7477.0 0. a major reclassifications has been carried out in the accounts of all the economic sectors.7 13618.9 14166.6 14696.8 1144.0 0.3 4993.7 3820.0 0.0 1000.0 0.5 1172.0 0.0 0.0 0.0 3000.5 3229.6 2232.4 22755.0 3324.9 35296.3 21.4 5918.9 1437. because of a break in continuity.7 --------3342.3 2022.0 2000.2 337.4 8458.0 2000.0 2450.7 5398.--------.5 1052.0 750.3 1276.2 410.0 0.0 0.7 2955.0 636.0 15661.6 1071.0 1400.9 4490.2 33797.3 33608.1 3000.0 2300.9 27495.0 0.0 0.3 --------462.3 33867.0 0.0 410.8 7957.0 500.0 0.4 9759.9 1006.4 4599.9 11011.3 16084.0 100.6 835.2 12321.3 6471.2 1205.5 4855.0 0.0 0.0 0.0 1341.6 4500.0 3324.6 36034.0 2450.0 0.0 1000.5 15313.3 4993.3 15843.6 25431.0 0.0 2000.7 0.0 0.2 1097.6 37928.6 3372.2 4193.6 161.3 1083.7 3314.2 31608.0 2000.3 5555.8 13183.4 7282.1 --------1802.8 935.5 6339.6 1609.8 1058.0 0.4 1183.0 --------.Capital Rupee Others Deposits ing Account 918.0 3000.4 35508.0 2000.0 2000.2 3239.0 2000.0 0.8 3559.4 2762.0 3000.1 3071.0 3917.6 15525.0 20037.8 3166.0 2000.6 6160.0 0.0 2000.1 3000.5 Foreign Liabilities RMA Bills Govt.1 25839.7 3347.7 4798.2 9727.4 7111.8 3000.0 200.0 5078.0 33543.0 277.0 0.9 7961.2 23950.0 0.3 32634.0 0.3 36374.1 17477.4 39468.0 3000.0 22349.3 3633.6 4540.7 1166.1 3590.6 18220.0 0.0 0.7 9839.1 3165.0 0.3 1590.0 1800.4 3417.3 2251.6 3850.0 0.0 0.5 1039.0 1434.3 15247.0 1100.3 37060.7 1237.8 33768.3 22.3 2022.4 1257.0 3841.TABLE 7.4 220.9 12284. Data prior to 2003 cannot always be directly compared with the subsequent data.0 0.0 1000.8 7687.0 0. .8 3839.1 3824.6 14117.0 --------0.3 2070.7 5513.2 20366.6 2612.7 25986.3 End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 11253.0 5066.0 0.8 12791.8 3000.8 4454.6 9848.7 19350.0 0.2 6381.9 15964.8 9351.4 1731.0 0.8 37514.0 0.7 2404.6 3494.0 0.0 1000.4 18510.0 2563.0 1022.0 1400.0 12871.5 8665.3 1022.7 9344.6 1784.2 4640.0 100.8 14516.0 3000.0 0.0 0.0 3000.5 27335.1 19603.0 0.2 4578.0 *) Starting from January 2003 onwards.6 26532.0 0.9 --------12260.7 2692.0 13613.0 1800.8 --------174.7 6982.0 0.9 3217.3 3831.6 4196.7 8122.1 26612.0 0.7 8040.4 8801.0 1000.8 4047.7 4980.0 0.0 3917.0 1000.0 0.0 0.0 3000.0 750.5 3941.0 0. CONTINUED Royal Monetary Authority of Bhutan Millions of Ngultrum Liabilities Reserve Money Of which: Currency Outside Total Banks 6021.0 636.3 35793.0 3000.0 3000.0 0.0 2400.2 1495.3 5356.5 5661.4 35001.0 4879.7 5046.6 Total 0.0 0.8 20574.5 1074.4 9774.0 2300.1 5103.9 3672.2 1280.5 1504.2 1039.7 4798.7 1269.0 2000.0 0.1 36492.0 17946.4 1485.7 1302.0 0.0 9222.0 4073.0 0.3 13867.6 1318.7 2264.2 13933.6 4500.6 1258.3 0.8 9344.8 3780.1 3708.2 20221.0 3000.3 1022.0 3000.6 1124.0 500.9 4973.7 0.6 4168.3 1022.0 2000.3 5267.3 9842.7 1156.8 37366.5 4349.1 4204.0 3000.7 39296.1 3492.6 12732.3 205.0 1000.1 24706.9 1002.8 8819.0 0.3 5076.3 3518.0 0.0 13377.3 5929.0 3841.3 2022.0 3000.6 21741.5 7686.0 1087.0 0.9 3640.9 5710.0 1000.1 3690.0 34978.6 1281.0 0.--------0.0 1000.0 0.3 0.0 3000.9 141.9 1652.3 946.5 1133.3 5267.8 14471.0 2000. Outstand.7 Other Items ( Net ) 3683.8 37148.0 0.6 4920.1 5386.0 0.

1 Aug 29994.4 -------6342.6 1742.7 246.0 973.1 5080.6 1898.7 2370.5 1828.7 1049.8 1062.5 4923.6 59.6 1308.4 4688.1 2206.3 561.9 13016.3 15472.9 12682.3 Others 1092.5 25177.4 Claims on Private Sector Claims on NMFIs 11518.9 May 45422.2 1133.9 1702.0 1100.6 2569.0 0.7 12016.6 5305.3 19521.9 383.5 6126.7 11.0 0.6 774.4 2445.7 1143.8 406.2 11239.0 59.6 3039.9 16250.5 3239.8 4017.1 17843. DEPOSIT MONEY BANKS .6 1878.3 60.8 1126.3 1933.3 Feb 45833.1 3709.5 50.2 1719.0 0.2 11252.1 20738.3 593.8 15715.6 1287.6 18789.3 574.3 1133.3 21139.0 -------4903.6 6473.0 Claims on Govt.0 342.5 568.6 285.7 1623. .1 767. 332.0 2439.7 1917.0 859.2 355.7 24441.9 3585.4 16600.2 1793.7 561.5 983.7 0.0 1054.8 607.9 4326.9 1324.3 330.9 Jul 29401.5 1134.4 4008.3 126.3 Claims on Joint Corps.8 1616.2 356.6 Jul 34557.1 1184.5 354.6 0.4 6608.8 1777.2 637.3 1020.0 0.7 4194.1 Oct 33000.9 1943.4 Oct 40263.2 612.3 78.6 250.9 1111.6 19322.0 24523.5 2793.7 561.7 749.0 1168.4 365.4 1665.0 0.4 13418.8 3033.0 73.1 7662.0 2239.7 342.1 Nov 44522.4 49.0 2007 28621.7 1910.1 1054.9 Aug 37153.1 11898.5 Apr 46496.1 Apr 28417.0 406.6 1076.8 540.2 13797.7 16919.8 415. a major reclassification has been carried out in the accounts of all the economic sectors. because of a break in continuity.7 555.7 13112.0 0.0 16059.6 1091.7 Feb 33264.7 11.8 14619.0 1106.2 -------2003*) 16964.6 11751.9 10934.0 370.4 1265.5 2804.0 149.1 9423.2 142.8 117.9 1107.8 Apr 33605.9 Mar 33572.1 10723.9 915.1 1499.5 11798.5 Nov 34010.8 1188.2 252.6 315.6 868.7 934.4 609.6 Sep 31602.9 2480.3 1325.2 832.1 3576.4 1252.2 20948.0 1110.2 3328.7 355.3 1470.0 0. 50.3 609.8 -------321.1 17477.0 0.9 356.0 1179.4 1369.8 1538.2 2622.7 1756.4 11734.4 3163.5 50.0 898.0 1054.0 586.6 3067.5 610.2 658.8 9858.3 955.6 1648.6 762.0 16047.0 0.6 -------2588.8 609.3 616.8 1141.0 0.7 10106.5 2442.6 11323.0 1114.2 901.3 1268.3 570.0 0.4 *) Starting from January 2003 onwards.3 6461.2 2315.2 1154.0 15993.4 561.1 610.2 349.9 61.6 50.6 11522.0 0.2 135.0 May 33671.0 0.9 16716.3 361.6 2041.8 50.2 359.5 642.8 4962.0 2004 19532.2 1107.9 19753.5 7.1 18823.2 551.4 6027.2 1080.5 1948. Corps.0 0.4 537.4 2165. 1) End of Period 2000 2001 2002 Total Reserves 4669.1 1745.2 429.1 13965.8 1228.4 11267.7 352.3 18615.8 2010 Jan 42748.7 565.2 13240. Data prior to 2003 cannot always be directly compared with the subsequent data.9 17702.6 11689.1 2364.MONEY AND BANKING STATISTICS Millions of Ngultrum Assets Foreign Assets Claims on Govt.6 74.4 1757.2 Dec 35349.9 1794.8 380.0 3653.8 1383.6 1110.3 610.0 0.3 2005 21879.0 637.7 3228.0 Mar 28304.9 1512.5 1292.5 Mar 48480.0 0.1 12112.2 2006 26484.5 2868.3 109.7 1108.4 50.0 400.6 1000.8 1151.3 1589.9 16155.3 Feb 19810.2 1786.5 50.TABLE 8.1 17140.3 1643.0 0.5 1204.9 17597.8 23582.9 May 27834.9 561.7 567.0 1411.4 -------2315.------------227.4 1180.4 1181.8 1282.6 2737.1 117.0 2008 Jan 26530.1 Total 4716.4 15035.4 2306.0 0.3 Jun 45442.7 607.2 13946.0 -------1102.0 0.0 0.4 363.9 1519.0 1620.7 577.0 9873.0 1054.6 1753.3 --------------.8 11979.8 2299.5 616.2 18380.2 319.9 1216.8 320.1 11464.5 1107.6 14474.0 0.1 1437.8 8648.4 2009 Jan 32590.4 11517.0 3335.7 766.0 0.7 3.6 1651.1 Jun 27279.7 Rupee 3623.3 59.9 362.6 14038.0 1054.1 12611.6 Jun 33365.3 833.2 934.9 17585.1 414.1 Dec 45506.2 1576.2 1209.6 18152.2 Sep 37799.

0 0.4 3764.0 -------0.8 15698.0 0.5 2899.4 40263.0 0.0 0.0 0.3 3162.0 0.8 12831.0 0.0 0.5 48480.0 1155.0 0.0 0.0 0.0 0.0 3392.6 12613.3 Total 0.6 1121.9 37153.8 5512.0 33671.7 393.0 0.5 1110.9 2801.0 14335.9 1127.0 0.0 18671.0 0.0 0.4 3084.3 1086.0 3303.0 0.0 0.7 11386.0 0.2 26484.0 0.0 0.0 0.0 0.8 42748.8 33605.9 2028.0 0.0 0.1 11528.0 966.1 1235.0 -------0.0 0.9 12123.0 0.7 2581.0 0.0 0.2 345.2 14867.5 2268.6 349.0 0.0 0.0 0.0 0.0 0.   .7 16024.0 21327.0 0.7 33264.7 787.0 0.2 1988.0 0.0 0.9 1490.3 15342.1 958.6 2688.1 2436.9 239.8 -------4967.4 13286.0 3084.0 399.0 0.0 0.0 0.0 0.8 9940.7 1919.8 1209.0 2609.0 26530.1 1598.4 -------1331.0 0.0 0.2 1445.0 0.3 471.0 0.0 0.7 2615.4 1832.2 2571.1 44522.4 1215.0 0.0 13340.3 18027.1 29994.0 1155.0 0.0 0.0 349. Others Deposits 0.8 2840.6 33365.0 0.3 588.7 3005.9 16045.7 2877.3 -------1637.0 4998.0 -------0.0 1155.1 17335. Rupee Liabilities are shown separately and are not included in Other Liabilities anymore.7 9690.0 0.1 6565.3 1356.9 14081.0 3334.4 14392.7 2029.0 0.0 3004.6 1389.0 0.1 0.2 Rupee* 0.0 0.0 0.2 1287.2 1161.7 19748.5 12955.0 0.7 3783.3 10700.0 0.0 0.9 2555.0 0.0 0.3 1334.3 13164.5 1552.0 0.0 0.0 0.9 Credit from RMA 0.0 0.0 0.0 0.4 2272.6 31602.8 11410.0 0.7 1350.4 5628.5 2791.0 0.4 936.9 14245.8 731.0 Other Items (Net) 1465.1 3065.0 0.0 0.0 0.2 Foreign Time Currency Deposits Deposits 5815.9 45422.2 13833.4 19496.9 27834. From January 2001 onwards.0 872.0 0. (*) Between 1994-2000.0 0.0 0.3 6260.0 -------0.0 0.0 0.0 0.0 0.0 20262.4 1086.7 3214.0 0.5 3238.1 27279.8 End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 11518.0 0.7 1226.8 19376.0 0.0 3094.6 977.5 -------1046.TABLE 8.9 2012.0 0.0 17642.5 46496.0 (1) Demand Deposits include Saving Deposits.0 0.1 19231.0 0.3 45833.4 1039.9 12678.0 0.3 794.0 4477.0 0.0 0.5 5120.0 0.8 2838.0 0.0 0.0 0.8 1916.0 0.7 2621.4 0.1 1114.0 0.9 10751.5 2300.1 33000.1 2464.0 0.2 10422.0 0.0 0.6 2578.0 0.9 1333.0 0.5 5983.2 5322.0 0.0 0.0 0.0 0.1 1145.0 0.0 1755.0 0.3 45442.1 14133.0 0.0 0.0 18401.8 957.2 15346.0 0.4 -------1950.8 13423.5 16405.6 3038.3 21879.0 0.0 0.4 -1323.0 0.0 0.1 12871.0 0.0 0.0 1150.5 1139.2 9790.0 0.2 1301.8 1415.0 0.9 2703.0 2861.0 0.5 9243.0 0.5 1248.1 28417.7 17048.9 1847.8 1182.6 345.4 11609. CONTINUED Deposit Money Banks Millions of Ngultrum Liabilities Foreign Liabilities Demand Deposits (1) 2669.0 0.0 0.9 5707.0 0.7 13112.0 0.0 0.4 1384.0 0.0 0.7 2415.0 1045.0 349.0 0.0 0.0 0.5 18123.3 2309.9 12394.0 5464.9 33572.0 0.4 32590.2 37799.6 345.0 0.7 3551.0 0.0 0.0 0.0 0.0 0.1 28304.1 12555.0 0.2 35349.7 3326.2 2621.6 34557.7 1823.6 12628.4 2345.0 0.3 12336.7 1069.0 0.6 16891.8 2762.0 0.0 0.1 12361.0 0.4 12554.3 1188.0 1194.9 3347.0 0.8 7957.0 0.0 0.0 0.0 180.0 19532.8 17151.4 17939.0 0.8 9657.0 28621.7 12635.0 0.9 2302.0 0. Rupee Liabilities were consolidated under Other Liabilities.1 45506.5 34010.0 0.2 -------16964.0 9096.3 2913.0 Capital Accounts 756.6 349.0 9668.0 Govt.0 0.9 1829.2 13809.0 0.0 0.4 0.9 16155.0 0.2 631.2 345.9 12315.4 2347.0 0.9 29401.0 973.0 0.7 15527.6 12448.0 973.2 3683.8 -------6029.0 0.7 502.0 0.0 0.0 0.9 951.

6 121.9 7794.7 70.4 6250.0 527.---------.3 1464.3 527.7 Feb 0.0 527. .0 0.6 801.0 8813.0 4728.0 8.0 1625. a major reclassification has been carried out in the accounts of all the economic sectors.4 958.4 7993.9 3009.0 762.5 1025.8 0.0 4555.1 9052.2 1996.0 0.1 9028.6 ---------248.0 0.5 ---------2003*) 11602.1 42.3 558.0 7658.0 0.0 7575.9 646.0 605.8 2642.1 128.0 631.0 0.---------.9 May 19135.4 1743.2 5050.8 Feb 26066.5 Oct 19084.8 252.2 564.9 Apr 21025.0 Mar 17587.7 1076.9 2007 18431.6 Sep 17819.9 Dec 19645.4 718.0 1093.0 527.6 341.7 322.0 315.3 787.5 607.0 605.5 0.6 Dec 24905.0 580.5 570.7 7032.3 361.4 396.5 612.4 10139.7 10731.6 7364.1 571.5 1387.---------.3 307.2 667.0 9891.6 349.0 3136.6 543.0 679.6 515.4 399.9 5386.5 633.1 1442.0 542.6 Jun 21730.9 551.9 1978.0 0.0 0.0 527.4 606.0 0.---------.0 0.4 1948.3 372.8 3002.1 601.0 7565.0 2202.7 605.2 407.1 42.3 80.2 1339.0 527.0 2074.7 6773.0 0.0 0. Claims on Govt.5 232.0 75.5 1640.9 381.1 405.3 740.0 527.5 1122.8 489.6 10557.0 0.4 393.0 200.6 4189.1 535.6 888.7 1177.3 1973.9 Mar 17663.3 5540.6 334.0 527.4 507.9 0.7 0.5 3027.1 603.0 0.2 347.3 1931.9 2300. Sector Claims on NMFIs End of Period 2000 2001 2002 Total Reserves Total 7813.1 8472.0 0.9 8164.1 42.1 8428.7 9545. Corps.1 676.8 355.0 9596.3 375.0 0.0 0. Claims Claims on on Joint Private Corps.9 347.5 7329.9 2196.2 11884.0 Nov 20177.5 1129.0 527.1 543.2 42.2 1089. BANK OF BHUTAN LIMITED-MONEY AND BANKING STATISTICS Millions of Ngultrum Assets Foreign Assets Claims on Rupee Others Govt.0 0.9 10974.5 605.9 475.4 8727.4 534.0 564.1 May 16670.9 361.7 815.7 2617.0 0.0 Sep 21874.0 Feb 17571.7 0.7 8182.6 1232.1 200. because of a break in continuity.9 1690.5 0.0 527.0 1172.8 1869.2 2005 14404.8 Mar 23544.2 8523.0 8.0 277.7 817.7 Jul 18746.5 4320.9 8853.8 1140.5 Aug 21029.2 488.2 2070.0 332.0 2495.2 399.0 453.7 527.6 376.7 371.0 558.4 7277.7 606.5 153.0 0.4 5674.2 1025.5 606.0 998.1 495.7 3937.3 7780.0 110.0 7625.6 8080.1 4399.6 8442.7 1699.5 0.4 Oct 21874.8 4333.8 10553.0 0.9 885.2 853.7 0.8 535.6 476.5 424.2 110.5 1473.8 43.2 633.0 1355.0 571.7 680.6 642.9 750.0 573.5 1235.1 527.1 8727.4 628.3 1241.1 9535.---------4900.0 149.6 1187.8 447.3 549.0 535.4 1171.9 2272.3 Jun 15337.5 13306.8 668.7 952.1 966.1 Aug 16651.5 1367.4 549.0 0.3 509.5 Jul 16966.3 10745.8 358.0 0.1 0.2 7130.1 8182.0 1113.0 4342.0 152.5 Jun 17906.2 2437.0 2009 Jan 17363.4 1079.7 558.2 ---------.2 449.6 2122.6 9013.2 2008 Jan 15973.1 344.5 Apr 17187.5 May 22299.5 135.5 7591.0 7377.6 351.2 558.9 8568.5 1553.5 547.0 0.3 354.TABLE 9.5 9137.3 3660.3 4134.0 527.0 652.0 0.3 2004 13013.3 802.9 0.5 718.7 1205.4 Nov 23850.9 840.4 5159.4 2010 Jan 22942.9 9019.2 9831.5 7647.2 7051.0 527.5 654.2 10745.6 508.5 557.8 42.3 1183.1 *) Starting from January 2003 onwards.6 347.7 1680.3 1530.0 558.4 1387. Data prior to 2003 cannot always be directly compared with the subsequent data.3 9938.---------.2 3552.8 1419.6 50.0 527.1 42.7 5994.7 9723.0 633.7 11300.0 0.0 682.0 0.8 1959.6 1121.6 421.3 553.0 9387.0 0.2 605.8 4517.6 567.0 0.4 4957.5 2006 16930.3 583.0 8840.3 777.6 373.7 949.0 604.0 0.7 1649.---------.2 101.0 561.6 406.7 353.3 250.7 Apr 18794.0 7867.5 1356.

0 0.0 0.6 4081.9 Mar 17663.0 0.7 4081.3 4603.9 3517.9 (*) Between 1994-2000.0 0.0 0.7 0.0 0.0 507.8 9908.0 0.3 1456.1 3973.0 0.7 Jul 18746.1 1462.0 0.0 4070.4 973.8 4226.9 11566.8 333.0 0.1 731.2 8308.0 0.0 0.3 0.7 4809.0 0.0 0.4 2010 Jan 22942.8 4672.8 0.0 9271.0 0.8 678.1 4085.0 0.0 0.0 0.3 10653.---------.0 0.3 905.0 0.8 3408.1 12149.0 441.2 0.0 0.6 0.0 0.0 829.0 0.0 1688.0 0.6 495.0 0.0 0.0 0.0 0.0 0.2 2008 Jan 15973.6 810.3 3553.8 1341.4 467.5 3525.8 2165.0 0.0 0.0 0. Capital Rupee* Others Deposits Borrowings Accounts 330.0 0.2 Mar 17587.0 0.7 5505.0 0.5 Aug 21029.0 513.0 0.4 ---------4093.3 11178.0 654.3 973.0 0.4 2011.0 0.5 4201.0 1807.0 0.1 2554.7 935.0 0.1 4256.0 0.0 -2485.6 2172.0 0.0 Sep 21874.0 0.0 ---------0.7 799.3 1697.7 835.0 7671.0 0.2 692.7 1580.4 4352.0 0.4 10328.2 1890.7 4280.5 ---------2003*) 11602.3 Jun 15337.1 0.8 11138.0 0.7 1692.0 0.0 348.0 0.1 517.9 May 19135.0 0.5 Apr 17187.5 -464.9 0.3 2004 13013.0 0.7 606.0 0.1 4934.2 4927.0 Feb 17571.0 0.5 2006 16930.6 4451.0 0.4 Nov 23850.0 0.0 0.0 0.0 0.1 1574.0 0.7 733.0 0.3 4391.0 0.0 0.9 988.0 609.0 0.9 2190.4 0.0 0.6 4670.6 5366.0 0.2 2005 14404.5 9137.8 1620.9 3999.0 411.0 0.0 0.0 0.3 10959.8 620.4 822.2 ---------3519.0 0.0 4790.8 11184.9 579.1 10148.0 0. .0 ---------.7 Feb 15222.0 0.9 3926.0 0.0 0.1 2403.4 Other Items (Net) End of Period 2000 2001 2002 Total Total Domestic Govt.0 0.5 ---------924.2 9903. CONTINUED Bank of Bhutan Limited Millions of Ngultrum Liabilities Foreign Liabilities Foreign Demand Time Currency Deposits Deposits Deposits 1998.0 0.0 0. Rupee Liabilities   are shown separately and are not included in Other Liabilities anymore.0 80.0 0.0 0.0 0.0 0.6 536.3 4329.0 0.4 2107.0 0.7 1348.7 1850.5 1075.8 2459.6 0.0 0.3 1573.6 1654.---------937.0 0.9 Apr 21025.0 640.0 0.8 327.1 1081.0 0.5 Oct 19084.0 0.0 0.0 0.5 692.0 0.0 0.0 10355.0 0.0 0.8 4140.4 11558.0 0.6 829.7 0.6 Dec 24905.0 0.0 0.7 1124.3 655.---------.4 630.0 0.3 158.0 1353.1 3982.0 0.9 Dec 19645.0 0.0 0.2 4094.8 Mar 23544.0 0.4 10185.0 0.1 Aug 16651.0 0.1 14571. Rupee Liabilities were consolidated under Other Liabilities.1 4218.8 3203.0 0.0 0.0 0.1 3756.6 2132.0 0.7 11674.2 2329.2 13412.5 842.0 2009 Jan 17363.2 4139.6 775.1 10438.0 0.0 0.2 9764.5 591.6 862.0 0.0 0.0 0.0 0.0 0.6 2516.0 0.0 3903.2 11966.0 0.8 1492.7 11300.4 9610.0 0.0 0.8 Feb 26066.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 1025.6 Jun 21730.3 2761.0 0.5 1808.9 3559.0 600.0 0.7 3860.0 0.0 0.0 0.2 2010.0 0.9 3951.0 9135.3 1491.5 1339.2 834.3 10438.7 11178.0 0.0 -79.0 0.0 4213.6 1598.0 0.0 0.1 May 16670.2 865.0 0.0 1487.0 7813.5 May 22299.0 0.TABLE 9.8 1657.0 0.0 0.0 0.0 0.5 466.1 13952.0 0.0 0.0 1942.0 0.7 795.0 0.7 3407.0 0.1 1234.8 654.0 0.3 11718.6 2128.5 1441.0 0.0 0.8 12981.9 2007 18431.9 833.0 Nov 20177.1 842.0 0.2 1678.0 0.0 4223.4 0.7 1657.0 0.6 Sep 17819.0 0.0 0.1 1595.0 0.3 4736.8 4974.8 1768.9 1192.0 0.0 0.---------1002.9 3744.2 11861.0 0. From January 2001 onwards.5 Jul 16966.0 209.2 3536.0 0.0 0.4 635.0 0.0 0.0 0.0 0.9 1941.5 Jun 17906.7 Apr 18794.9 13774.0 0.0 0.0 0.8 ---------.2 5612.0 0.8 1068.9 907.4 Oct 21874.0 0.3 3628.0 0.0 0.0 0.5 918.0 0.1 2411.0 0.

1 610.1 1679.9 9271.0 834.8 Reserves Total Rupee 535.2 7.7 3. Claims on Private Sector Claims on NMFIs End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 3705.0 0.2 8363.8 0.0 1108.7 3.4 1129.8 1187.3 2246.6 652.---------.6 11230.7 3.3 120.8 0.2 404.7 3.9 3588.0 14810.6 13916.5 754.7 3.9 389.7 10700. Corps. Claims on Joint Corps.2 527.4 590.7 581.6 448.8 11942.8 9119.7 207.1 637.2 9819.5 10894.0 5.6 7.7 9553.6 7.6 7.---------.6 7662.9 595.8 1941.8 10556.7 7493.2 1361.0 527.6 7.6 7.3 4739.8 3219.6 7.1 15458.3 11351.1 9565.4 318.6 7.3 3908.0 0.3 825.0 527.6 1088.0 608.---------.TABLE 10.0 969.7 833.8 600.7 3.2 121.6 7.7 3182.7 20671.4 978. because of a break in continuity.7 6519.6 7.6 3694.7 1289.7 3.0 0.6 7.1 2512.7 3.7 3.6 967.9 15811.6 7398.0 7.9 1007.6 7183.4 ---------108.7 3.0 0.2 93.4 1380.---------.0 0.9 51.0 13343.8 810.0 11203.7 *) Note: Starting from January 2003 onwards.7 0.6 7. a major reclassification has been carried out in the accounts of all the economic sectors.6 242.6 7.3 120.5 144.8 18351.5 171.---------1441.7 10433.9 3.0 0.4 15227.6 1942.6 7.8 581.1 10189.7 3.3 9015.8 536.4 12435.5 8528.9 8257.7 21890.3 20957.1 7.8 265.0 0.1 73.0 0.2 268.6 4988.7 3.7 1391.4 4471.0 0.6 0.7 3.7 3.6 2210.3 15704.5 580.0 609.0 9908.8 5247.0 197.0 1778.3 11626.0 0.---------.2 342.8 299.9 797.6 7.7 290.5 120.9 721.5 790.6 7.8 2825.4 609.6 74.1 4911.0 3425.6 3873.0 2248.2 4854.1 8189.5 10607.0 8785.3 133.7 53.5 13832.2 10158.MONEY AND BANKING STATISTICS Millions of Ngultrum Assets Foreign Assets Claims Claims on on Govt.9 584.5 11026.1 14536.7 3.1 297.2 1148.5 2221.0 0.7 11163.6 2966.0 0.1 0.2 11922.8 446.5 196.2 536.7 317.7 3.5 5512.3 3975.2 536.1 966.0 0.8 463.0 59.2 4614.7 7.0 0.7 3.7 3.1 535.3 1275.0 943.6 7.0 464.8 990.3 59.0 0.0 0.7 3.2 680.9 540.3 682.8 86.9 1707.0 331.6 7.7 3.7 3.4 19805.9 593.1 2053.9 3841.9 1258.6 10299.7 3.6 7.0 609.6 7.8 2179.1 ---------.9 11538.8 1857.7 3.6 583.0 0.7 531.9 8480.4 1213.0 609. Data prior to 2003 cannot always be directly compared with the subsequent data.7 296.1 9976.0 0.0 0.0 587.0 527.6 250.7 1679.6 7.6 7.9 11324.0 73.6 115.0 13782.6 7.5 1152.7 3.6 7.3 965.4 864.9 6938.1 15925.7 3.6 685.7 525.0 0.0 1152.8 597.7 ---------5361.0 1671.0 0.2 598.9 61.6 1209.2 631.1 578.7 3.1 1012.0 18388.7 696.0 0.2 284.0 1552.2 6853.8 7833.7 3.3 60.7 1123.1 7883.4 750.6 1694.9 233.0 1595.6 7.0 527.8 1115. Others Govt.5 886.6 59.1 764.2 7040.6 20601.0 579.0 0.1 7474.7 5232.9 471.3 167.---------.6 15693.5 1016.5 202.0 15909.9 661.4 3393.0 527.2 1840. BHUTAN NATIONAL BANK LIMITED.0 635.9 698.7 3.9 9339.3 583.7 3.5 248.6 7.0 405.1 525.6 795.5 7.4 18133.6 7.5 19766.6 3818.0 1221.5 599.0 7.3 536.2 580.7 3.1 8941.6 7.9 668.7 3.1 10716.6 370.6 7.0 576.0 0.5 329.8 966.9 580.7 351.2 651.3 761.1 557.9 773.7 7.8 356.6 949.1 850.4 467.1 165. .7 347.4 1203.1 1917.8 828.1 262.4 16124.0 527.0 1824.4 233.6 7.5 8059.3 668.

4 297.5 1564.0 0.0 0.0 0.8 514.8 1336.8 1008.0 3827.4 554.5 14324.4 8694.2 1615.0 0.6 498.0 0.2 0.6 13916.7 6519.0 0.4 ---------873.0 0.0 7457.0 0.4 18133.0 0.0 0.0 0.0 0.0 0.0 0.0 14810.5 1091.4 16124.3 11.9 1477.0 1832.0 0.4 650. .3 1153.0 0.2 455.8 10556.-In January 1997.0 0.0 556.6 2528.0 0.0 0.9 9084.0 0.0 0.4 12435.2 2547.0 0.3 181.7 9787.1 1518.5 454.4 17046.1 1451.0 13782.0 0.0 0.7 7528.0 351.0 0.8 4162.3 1060.7 2996.1 419.3 0.0 0.2 534.0 0.8 11942.1 1998.5 19766.0 0.0 0.0 0.0 0.0 0.0 0.5 836.0 0.4 3049.8 525.0 0.8 669.1 259.1 6020.0 0.0 0.1 9311.0 0.6 6341.8 1426.0 1117.0 0.0 2119.0 0.0 0.9 1127.4 445.6 115.0 0.0 0. CONTINUED Bhutan National Bank Limited Millions of Ngultrum Liabilities Foreign Liabilities Demand Deposits (1) 671.4 412.0 0.2 860.9 4162.0 15909.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7 2941.3 1260.2 1160.8 303.0 0.0 0.2 1580.6 1945.4 285.1 1426.4 57.0 0.1 2478.1 10189.0 0.9 1444.5 13832.0 0.4 0.0 2277.0 0.0 13343.9 352.1 0.0 0.0 0.7 10700.8 242.8 5150.6 -1486.0 0.0 0.0 0.5 1292.0 18388.7 9553.3 20957.0 0.7 9862.7 383.0 0.9 1598.5 1129.3 683.0 0.0 408.6 5674.0 0.0 0.8 11833.9 (1) Demand Deposits include Saving Deposits.0 0.5 0.1 2445.7 328.8 8037.0 0.0 0.0 0.2 386.1 919.0 0.3 3393.0 0.2 1125.5 1284.8 938.0 0.1 1373.0 3730.0 0.1 0.9 -137.1 15925.0 0.0 0.0 0.1 15458.-----------------------------.0 0.9 326.1 3205.7 2220.0 0.6 15693.0 0.6 20601.0 0.1 461.2 0.8 3967.0 3154.0 0.3 15704.1 1350.0 0.2 397.2 -1420.0 0.0 0.6 ---------. the Unit Trust of Bhutan was converted to Bhutan National Bank   (the second commercial bank in the country).0 0.0 0.0 0.6 594.7 1125.0 0.7 412.0 0.TABLE 10.0 640.0 0.1 293.1 1610.0 0.0 0.8 2838.0 0.0 0.0 840.0 0.4 1527.0 0.6 1493.0 0.0 207.0 0.0 0.0 0.0 0.7 4998.0 0.1 7474.4 15227.0 0.0 0.1 14536.0 0.0 0.0 0.0 0.1 1419.2 8844.1 5410.0 0.4 1129.0 0.2 4507.0 0.0 0.8 18351.0 0.6 11230.0 0.0 0.6 742.1 2495.1 1129.2 12128.6 0.1 15167.3 320.0 0.7 1128.7 4300.0 0.0 0.1 276.7 3125.0 0.2 13680.7 11163.1 9109.0 0.0 0.7 3686.9 15811. Capital Domestic Deposits Deposits Total Rupee Others Deposits Borrowings Accounts 2070.6 -2370.9 1613.3 1438.2 4854.6 2348.0 0.0 0.4 325.5 22.0 0.0 0.0 0.0 0.1 13887.2 -1108.1 173.0 2467.0 0.7 15910.7 21890.0 0.0 Foreign Time Currency Govt.0 0.0 0.2 556.0 0.5 408.7 ---------5361.0 0.8 4160.0 0.7 15492.8 1415.1 373.0 0.2 3695.0 0.8 1188.0 81.0 0.2 29.0 0.6 9794.0 0.0 ---------0.8 322.7 1272.0 0.---------44.4 6919.0 0.0 0.0 0.0 0.9 1109.6 389.0 499.8 9220.4 393.0 0.6 1722.0 0.0 0.0 0.1 4880.1 -1661.0 ---------.1 1678.0 0.6 ---------2510.1 1522.0 0.1 5668.1 11905.0 0.0 0.0 0.0 0.4 3200.0 0.0 0.5 4021.0 0.0 0.7 20671.7 1069.9 310.0 327.0 0.0 0.3 -1380.0 0.0 0.0 0.4 3195.0 2553.0 0.0 0.4 8651.0 0.9 4106.6 3057.3 -1253.1 10716.3 3975.5 148.2 3866.---------700.7 154.0 0.1 30.4 19805.0 301.0 951.0 Other Items (Net) End of Period 2000 2001 2002 2003 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 3705.0 0.0 0.0 0.3 1221.7 796.4 8410.2 1308.0 0.0 1026.0 0.0 0.

0 0.4 -270.0 0.0 1176.f March 2010.0 0.0 0.9 -187. 0.8 0.9 448.3 215.0 0.3 3235.0 0.0 1155.0 0.9 0.0 34.0 0.6 349.0 186.0 Claims on Govt. CONTINUED BHUTAN DEVELOPMENT FINANCE CORPORATION LIMITED Millions of Ngultrum Liabilities Foreign Liabilities Foreign Other Domestic Demand Time Currency Govt.0 0.8 454.2 345.6 349.2 0.0 3352.2 345.3 1163.0 End of Period 2010 Mar Apr May Jun Total Reserves Total 3045. 0.0 Claims Claims on on Claims Joint Private on Corps.6 345.0 0.0 19.6 73.0 0.0 0.0 1150.9 3025.5 1134.6 3277.4 1160.0 0.0 0.2 End of Period 2010 Mar Apr May Jun .0 0.0 0.0 0.8 246.9 0. BHUTAN DEVELOPMENT FINANCE CORPORATION LIMITED(*) MONEY AND BANKING STATISTICS Millions of Ngultrum Assets Foreign Assets Claims on Rupee Others Govt.0 0.3 3091.0 0.6 345.8 -96.0 0.2 0.0 0.3 3235.0 349. Corps.9 34.5 3199.0 0.e.0 1155.0 3352.3 192.2 3127.3 0.0 0.0 0. Capital Items Total Deposits Deposits Deposits Total Rupee* Others Deposits borrowings Accounts (Net) 3045.0 1155.8 459.   TABLE 11. Sector NMFIs 0.0 0.0 0.9 0.2 3127.0 0.4 0.0 (*) Reports on the new deposit taking instutions in the financial sector are recorded w.0 0.3 453.TABLE 11.4 16.0 349.0 0.

2 584.0 0.5 End of Period 2010 Apr May Jun Total 1058.0 0. Sector 0.6 557.8 631.0 202.f April 2010.6 512.1 4.0 Claims Claims on on Joint Private Corps.0 0.0 0.1 (*) Reports on the new deposit taking instutions in the financial sector are recorded w.0 Claims on Govt.6 9.0 0.0 0.e.1 -210.2 83.0 0.0 Other Items (Net) -76.7 Claims on NMFIs 0.0 0.0 0.CONTINUED Druk PNB Bank Limited Millions of Ngultrum Liabilities Foreign Liabilities Foreign End of Demand Time Currency Govt.0 0.0 200.0 0.   TABLE 12.0 Jun 1290.5 533.3 2.6 1227.0 0.6 385.0 192.0 0.0 0.3 0.5 1290.3 569.4 May 1227.0 455.6 -67. Corps.1 714. 108.5 384.7 Total 113.2 0.0 0.0 0.MONEY AND BANKING STATISTICS(*) Millions of Ngultrum Assets Foreign Assets Claims on Rupee Others Govt. DRUK PUNJAB NATIONAL BANK LIMITED.9 80. Capital Domestic Period Total Deposits Deposits Deposits Total Rupee* Others Deposits Borrowings Accounts 2010 Apr 1058.1 Reserves 489.0 0.0 0.TABLE 12.7 0.0 0.2 82.0 0.0 0.0 0.0 0.9 .7 622.0 192.6 73. 0.

1 526. Joint Corps.0 0.0 0.0 Other Items (Net) 10. 0.1 131.6 End of Period 2010 Apr May Jun Total 328.0 Govt.3 354.0 0.0 0.3 718.0 0. TBANK LIMITED -MONEY AND BANKING STATISTICS (*) Millions of Ngultrum Assets Foreign Assets Claims on Govt.0 0.0 0.e.5 Rupee 2.1 372.6 117.3 718. Corps.1 Demand Deposits 100.4 96.1 0.6 Others 0.0 129.9 130.0 Claims Claims on on Govt.0 0.0 0.1 Reserves 87.0 0.0 0.   TABLE 13.2 Time Deposits 88.0 86.7 0.0 End of Period 2010 Apr May Jun Total 328.0 0.0 3. Deposits 0.0 0.8 Total 2.0 2.0 0.1 92.0 0. CONTINUED TBank Limited Liabilities Millions of Ngultrum Liabilities Foreign Liabilities Foreign Currency Deposits Total Rupee 0.0 0.8 Others 0. 0.0 0.0 0.0 Capital Domestic Borrowings Accounts 0.1 217.5 .1 526.0 Claims on Private Sector 238.8 Claims on NMFIs 0.9 (*) Reports on the new deposit taking instutions in the financial sector are recorded w.0 0.0 0.f April 2010.0 0.8 168.TABLE 13.8 52.5 53.0 500.8 163.0 0.0 0.

0 0.1 9.0 0.9 2928.6 74.7 2326.3 3127.1 45.8 6.0 3.4 3244.1 136.6 71.4 9.0 3.3 0.3 43.0 3.0 0.1 2475.1 14.0 3.2 6.3 37.1 30.0 104.5 33.0 0.1 32.0 50.0 0.2 48.2 33.3 37.0 0.4 49.8 0.2 8.0 3.2 1225.0 0.1 30.5 0.2 0.0 3.0 0.2 32.2 2427.0 3.0 35.6 1773.2 8.2 0.0 0.9 145.0 10.0 0.2 --------3.5 57.9 2600.0 0.0 0.8 143.0 0.0 0.0 3.5 28.6 2097.0 0.4 2147.0 0.0 0.1 375. Claims Claims Claims on on on Claims Govt.4 39.0 3.0 3.9 14.7 2062.0 0.4 0.1 3529.0 0.4 494.0 18.0 2010.6 47.0 0.0 0.1 46.0 0.0 0.4 9.0 0.0 0.2 0.1 8.0 15.1 20.0 5.5 136.2 3520.0 0.0 3.6 6.4 49.8 45.0 0.7 2761.0 0.0 .0 3.4 209.4 9.2 33.0 0.5 51.0 0.0 --------.0 3.0 3.3 0.7 98.6 45.6 36.0 3.7 37.9 2560.4 9.9 9.0 0.4 9.9 58.1 31.6 373.5 7.0 35. Corps.0 0.7 44.0 0.5 36.0 3.5 177.1 31.7 1992.3 45.4 3282.0 1.2 38.0 4899.0 0.9 687.0 0.2 206.0 15.1 13.0 0.0 3.0 0.2 1138.7 6.0 0.2 17.1 8.3 63.8 38. Joint Private on Corps.1 32.4 Total 956.6 33.--------0.8 78.7 44.2 162.6 28.4 1657.0 10.0 3.0 0.5 36.0 6.3 332.9 44.2 104.0 0.2 3247.1 37.1 2413.1 8.1 17.0 1964.8 9.8 1345.0 0.1 --------1468.3 57.0 36.8 37.0 2030.6 7.0 0.5 96.0 0.3 842.6 3.2 3231.4 9.0 0.0 0.0 36.2 0.8 521.0 2178.8 8.4 9.1 8.1 2404.7 2547.1 43.0 30.0 6.1 2262.7 47.5 36.0 0.0 36.1 3713.5 17.0 3.6 2713.5 0.2 2312.7 2381.0 35.7 3302.0 0.0 3.2 Reserves Total Rupee Others Claims On NMFIS 45.0 44.0 3.7 56.0 3.3 45.4 120.4 39.1 2862.0 2815.8 3029.4 9.7 1428.2 38.4 38.0 3.0 3.9 48.1 31.0 0.1 1931.0 3.7 4.0 0.1 8.0 0.1 37.9 1574.5 37.1 138.4 46.5 52.4 1259.0 110.0 0.0 0.1 9.2 32.1 313.0 0.0 3.4 9.2 1611.4 9.9 8.9 1077.8 2105.TABLE 14.7 --------.1 4.0 0.0 0.1 9.9 47.4 209.0 0.0 3.8 45.0 49.0 0.8 128.3 544.5 2682.0 3.4 9.0 0.4 119.1 14.6 47.0 0.6 55.0 0.0 14.3 1911.0 0.0 0.0 2014.0 0.1 6.0 3.0 0.--------25.9 3426.0 9.0 0.1 50.6 0.3 2178.0 0.--------131.8 2323.0 3336.1 14.0 3.4 119.8 2754.4 44.3 1876.0 0.0 2556.3 0.0 3.4 2132.0 137.1 31.0 --------.0 3.5 2308.9 3328.1 13.0 0.3 0.7 3599.0 0.7 2725.0 0.5 2311.0 --------.2 2451.--------0.7 156.7 2497.0 0.0 47.2 2613.4 2. ROYAL INSURANCE CORPORATION OF BHUTAN LIMITED .6 149.0 44.1 18.5 0.0 0.3 384.4 43.0 0.0 0.0 30.6 6.1 17.5 111.5 7.2 2513.0 0.0 36.5 4246.0 0.0 0.2 37.0 35.3 2827.0 0.1 13.3 8.4 9.7 2399.0 7.3 974. Sector DMBs 0.0 0.4 9.4 9.0 0.0 0.5 33.6 33.3 0.0 3.--------.1 2109.0 0.0 0.7 37.0 0.5 414.0 0.0 13.0 0.0 3.0 0.1 30.0 0.0 0.1 3.FINANCIAL STATISTICS Millions of Ngultrum Assets Foreign Assets End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Claims on Govt.3 210.9 3377.8 46.0 0.9 155.

3 375.7 221.0 0.8 151.0 654.1 1707.4 661.0 0.8 561.0 0.4 1657.6 569.1 55.2 47.9 719.3 403.0 0.0 214.6 210.1 271.8 233.0 --------188.0 644.8 --------450.0 557.0 0.0 780.6 --------186.0 0.1 250.4 306.1 504.0 0.6 1861.0 0.4 360.6 172.7 2.7 229.0 0.0 0.0 1184.2 197.8 2323.0 4899.2 249.0 780.7 578.8 534.3 --------236.1 627.6 591.9 433.6 2097.0 553.8 --------65.1 531.9 270.0 780.0 0.8 .0 780.3 168.0 1257.2 253.7 2062.0 595.0 153.0 0.4 561. CONTINUED Royal Insurance Corporation of Bhutan Limited Millions of Ngultrum Liabilities General Insurance Reserve Fund 0.5 4246.3 714.0 757.4 3282.0 207.0 0.0 0.1 179.0 0.1 216.3 475.3 360.1 230.2 216.6 525.2 262.0 757.4 214.2 590.0 780.4 206.4 290.7 274.1 157.0 0.6 386.0 300.7 3302.3 704.8 351.0 0.3 281.0 0.0 0.0 0.0 0.1 207.6 --------269.6 87.9 73.6 156.0 1207.0 757.0 0.0 0.3 494.3 658.7 2399.0 0.6 261.1 177.5 214.8 117.0 658.3 176.0 400.5 2308.0 1384.7 320.0 400.2 330.2 2427.0 0.9 261.6 681.0 780.1 687.2 579.0 Other Items (Net) -216.8 --------71.8 315.0 272.9 153.9 255.4 373.8 234.1 3529.7 1428.0 0.0 757.2 2451.5 170.3 275.0 445.7 235.5 237.2 271.0 220.6 2713.3 233.2 342.7 685.6 158.5 241.9 3426.0 262.0 0.6 203.1 212.1 2413.0 0.4 168.0 0.0 0.2 Life Fund 45.1 693.0 0.9 3377.4 227.5 Credit from DMBs 90.8 234.0 0.0 0.1 569.9 1077.2 741.6 271.0 0.3 325.0 1184.5 172.8 160.1 Group Insurance Fund 120.8 720.8 193.9 627.5 799.4 242.0 2815.0 120.7 2547.9 376.0 0.0 0.7 715.0 0.0 0.0 0.0 0.0 780.1 471.7 2497.4 196.6 199.0 End of Period 2000 2001 2002 2003*) 2004 2005 2006 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Jan Feb Mar Apr May Jun Total 956.0 0.1 --------1468.1 -77.9 303.7 609.5 372.0 0.7 141.1 223.1 2404.8 2754.7 223.2 299.1 543.7 2725.0 0.0 0.6 164.5 336.4 150.1 190.0 0.7 239.0 0.TABLE 14.7 682.2 116.0 Credit from NBFIs Capital Accounts 408.7 590.0 0.1 GEPF Fund 509.8 -231.8 774.0 480.0 0.8 93.9 179.5 1013.0 1284.0 0.0 0.5 320.0 0.0 0.5 307.1 533.0 757.5 251.1 -232.0 538.6 725.6 1773.0 420.2 334.0 780.6 545.5 560.7 694.0 0.1 3713.9 2600.6 524.7 2326.0 0.3 213.0 1207.0 0.8 825.6 169.0 270.2 183.6 179.0 0.0 780.0 44.0 2030.0 0.0 480.2 679.5 540.4 532.9 3328.0 1184.4 339.5 243.0 0.4 211.0 0.4 3244.3 200.4 209.5 2311.6 468.0 0.3 94.0 0.0 1484.9 2560.7 233.0 757.0 418.9 154.0 0.8 197.1 207.1 288.2 174.1 167.0 0.0 0.6 400.0 0.8 1096.4 1259.0 480.4 0.3 334.0 0.0 --------0.4 726.2 3247.0 673.0 350.0 780.0 757.

0 0.0 93.0 0.0 0.0 0. CONTINUED BHUTAN INSURANCE LIMITED Millions of Ngultrum Liabilities End of Period 2010 Apr May Jun Total 139.0 Claims on Private Sector 0.8 7.0 Others 0.3 51.0 Claims on Govt.0 Credit from NBFIs 0.0 0.4 General Insurance Reserve Fund 0.0 Capital Accounts 132.0 Claims on DMBs 93.TABLE 15 .0 0. 0.4 0.0 0. 0.3 144. Corps.6 164.e. 0.0 0.0 0.0 0.f April 2010.6 164.0 0.0 Credit from DMBs 0.0 GEPF Fund 0.0 Claims On NMFIS 0.0 Claims on Joint Corps.0 0.0 Group Insurance Fund 0.0 0.9 Other Items (Net) 6.0 93.8 153.6 71.0 0.5 .0 0.4 Reserves Total 46.0 0.0 0. BHUTAN INSURANCE LIMITED-FINANCIAL STATISTICS (*) Millions of Ngultrum Assets Foreign Assets End of Period 2010 Apr May Jun Claims on Govt.0 0.0 0.0 0.0 0.0 (*) Reports on the new Non Banking Financial Institutions are recorded w.8 10.0 0.3 144.0 Life Fund 0.0 Rupee 0.0 0.0 0.0 0.0 0.   TABLE 15.5 136.0 Total 139.0 0.0 0.

0 5.5 3.0 1000.0 100.5 3.0 1000.5 4282.0 100.0 1000.0 5.5 5.0 100.0 100.0 100.0 100.0 2000.5 3.0 100.8 R203 (*) Starting from October 29.0 6.0 100.f.0 100.0 6.4 3003.0 4.0 Discount Rate (%) 3.0 5.5 4.e.0 999.0 100. .2 3403.0 1000.0 100.0 100.0 1000.0 1000.6 2062.4 5287.0 1000. December 14.0 100.0 100.5 3.B:** The issue of RMA Bills has been discountinued w.0 6.0 100.0 100.5 3.5 2.0 2537.0 2206.0 100.2 4774.0 5.0 1000.0 1000.5 3.5 2.0 100.5 3.0 1000.4 3423.1 1871. AUCTIONS/TAP SALES OF RMA BILLS(*)/ GOVERNMENT TREASURY BILLS Auction/Tap Sale No.0 100.5 3. N.0 100.3 3437.5 3.0 1000.0 100.5 3.0 5.0 2371.0 2.0 100.0 6.5 3.0 1000.0 100.0 100.0 100.0 5.0 6.5 3.0 100.0 5.5 3.0 Accepted 100.0 100.0 1000.0 5. millions of Nu.0 6.0 100.0 100.4 4450.0 1000.TABLE 16.0 1000.0 2371. 2009 and has been replaced by the issue of RGOB Treasury Bills thereafter.0 100.0 5.4 3448.0 1912. R127 R128 R 131 R 132 R134 R135 R137 R138 R141 R142 R145 R147 R150 R152 R154 R156 R158 R161 R164 R166 R168 R169 R170 R171 R172 R173 R174 R175 R176 R177 R178 R179 R180 R181 R182 R183 R184 R185 R201** R202 Auction/Tap Sale date 31-Mar-04 28-Apr-04 28-Jul-04 25-Aug-04 27-Oct-04 24-Nov-04 26-Jan-05 23-Feb-05 25-May-05 29-Jun-05 28-Sep-05 30-Nov-05 22-Feb-06 26-Apr-06 28-Jun-06 30-Aug-06 25-Oct-06 31-Jan-07 26-Apr-07 27-Jun-07 5-Sep-07 25-Sep-07 30-Oct-07 3-Dec-07 12-Dec-07 15-Jan-08 18-Mar-08 22-Apr-08 24-Jun-08 24-Jul-08 14-Aug-08 25-Sep-08 25-Nov-08 8-Jan-09 14-Apr-09 4-Jun-09 8-Sep-09 14-Oct-09 14-Dec-09 17-Mar-10 8-Jul-10 Maturity in Days 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 91 30 30 30 91 91 91 90 90 90 90 90 90 90 90 90 30 30 91 90 90 Bids. 2001.0 1000.0 100.5 3.0 100.5 3.0 3442.0 1000.0 1000.5 3.0 100.0 1000.0 100.5 3.5 3.0 100.0 100. Received 200. Auctions were discontinued and Tap Sales were introduced.0 2730.0 1000.0 1000.0 100.0 100.5 3.0 1500.

6 1.1 3.6 1.2 2.3 2.5 108.3 609.3 284.8 226.7 1.1 280.2 1.9 1.466.6 226.6 198.670.9 1.072.1 2.8 1.3 1.4 202.6 189.7 138.0 656.138.8 974.280.4 3.2 1.9 660.2 331.413.5 854.8 1.0 2.0 1.9 169.6 2007 306.6 0.2 174.1 271.1 2003 247.999.4 1.0 450.655.8 72.4 4.9 718.5 142.2 253.7 1.060.8 142.2 1.3 261.6 1.0 235.0 2.7 440.9 1.6 499.1 632.9 2009 End of June 2010 491.7 447.0 2002 229.615.2 2008 523.7 806.2 0.2 240.5 1.3 221.2 3.641.7 1.5 2.9 180.9 41.8 11.3 341.2 0.5 4.3 2005 229.3 0.119. FINANCIAL SECTOR INVESTMENT BY ECONOMIC ACTIVITY Millions of Ngultrum Economic Sector/Source Agriculture BOBL RICBL BDFCL BNBL TBANK DPNB BIL Manufacturing BOBL RICBL BDFCL BNBL TBANK DPNB BIL Building & Construction BOBL RICBL BDFCL BNBL TBANK DPNB BIL 2001 201.416.157.6 2006 238.8 216.564.5 440.175.6 6.7 2.3 3.5 383.5 140.9 5.678.6 304.5 7.8 256.3 239.5 - 658.1 761.4 233.4 0.3 6.9 488.6 933.8 542.2 4.3 679.3 0.8 419.6 1.3 238.7 674.938.3 223.021.2 806.6 203.357.5 448.7 507.2 296.7 282.8 519.9 3.4 263.190.4 6.0 273.1 582.126.173.2 354.1 414.440.2 222.290.702.8 3.836.8 2004 222.1 1.5 210.828.9 1.1 785.8 491.5 394.8 408.894.056.955.3 3.3 523.484.4 2.3 1.1 685.TABLE 17.0 350.9 383.1 1.6 1.2 357.2 .1 5.318.7 453.907.113.085.3 2.

395.8 RICBL 124.7 140.8 1.1 266.1 29.002.5 154.7 458.6 2007 2.1 9.6 11.507.7 668.9 488.489.0 58.6 489. 729.1 1.775 Transport 712.7 280.7 2002 719.9 18.500.2 201.3 249.761.0 303.3 872.9 BDFCL 24.7 735.0 3.4 816.9 250.558.3 526.7 379.8 44.515.0 10.5 68.906.004.6 334.9 450.9 654.7 .3 408.6 680.628.0 317.7 57.521.9 712.083.2 411.0 338.0 244.2 RICBL 160.3 1.6 1.7 128.486.7 462.141.0 692.441.3 438.0 14.3 2003 960.1 BOBL 1.059.0 311.6 156.3 91.7 156.6 333.9 2005 1.7 2.4 214.1 497.231.8 81.3 2010 4.8 430.3 2.7 4.3 67.9 152.489.344.6 1.620.5 116.8 619.5 3.859.439.9 118.889.0 BOBL 404.6 24.4 217.7 602.3 BNBL 319.2 2008 3.7 127.1 BDFCL 181.1 1.1 1.683.8 TBANK DPNB BIL Total 4.6 187.3 975.9 1.2 2.504.4 7.390.TABLE 17.1 1.3 567.2 11.7 7.0 893.6 218.7 942.6 2009 4.4 3.3 *) Includes Services and Tourism.2 138.5 222.1 202.7 2006 1.480.8 213.4 3.5 828.0 390.6 297.5 1. CONTINUED Financial Sector Investment By Economic Activity Millions of Ngultrum Economic Sector/Source Trade & Commerce BOBL RICBL BDFCL BNBL TBANK DPNB BIL End of June 2001 512.3 436.8 409.1 655.0 2.923.0 811.298.8 115.1 35.094.2 220.2 29.7 4.2 12.185.6 341.8 4.0 2.6 277.5 771.0 372.1 2.494.3 1.9 46.142.0 250.9 7.7 447.2 87.466.399.6 2004 1.2 212.8 120.0 87.727.0 2.2 12.3 1.168.256.766.2 795.1 1.6 492.8 2.164.9 278.3 296.9 TBANK DPNB BIL Personal & Other Loans*) 1.639.359.194.4 151.0 BNBL 122.6 2.8 851.1 83.6 437.3 478.7 682.077.364.2 610.4 523.298.546.9 1.7 1.0 26.8 366.9 260.6 428.

84 2.85 0.87 124.70 154.78 6.30 0.04 0.74 140.19 134.32 7.21 131.3 100.74 9.38 131.38 133. -(*) The new index refers to the average prices during the respective quarters.02 140.81 140.88 0. The indices prior to Q3. 2004. However.75 8.99 3.14 160.72 12.68 Source : National Statistics Bureau.72 10.73 4.0 125.10 122.71 133. and Q1 and Q2.94 0.0 1.7 68.05 0.51 130.75 11. Includes rent.09 140.78 0.98 130..75 6.73 9. year-on-year rates of change of the CPI cannot be computed.67 155. SUMMARY OF THE CONSUMER PRICE INDEX (*) Third Quarter of 2003 = 100 Period 2007 Item Weight in percent % Q2 Q3 Q4 Q1 Q2 2008 Q3 Q4 Index Food Non-food Total 31. no quarterly price indices were calculated and.21 0.50 4.46 138.14 0.92 139.64 122.00 9.19 134.77 9.67 1.33 2.70 0.35 131.71 6. .73 6.22 5.75 139.25 157. 2003.96 0.81 150.81 8.83 137. the expenditure basket has been completely changed).74 0.95 4.12 131.75 7.e.3 100.55 122.30 121.52 7. The quarterly index and the half-yearly index cannot be directly compared because of a different periodicity and a considerable break in continuity (i.80 12.42 0.84 141.39 146. -1) 2003 Household Income and Expenditure Survey.03 0.31 5.68 125. 2003.75 12.54 0.84 6.7 68.74 129.39 5.90 5.43 4.82 8.52 121. prior to Q3.42 7. for Q3 and Q4.19 8.11 2. therefore.83 133.82 124.73 122.15 Q1 Q2 2009 Q3 Q4 Q1 2010 Q2 Percentage change on the previous year Food Non-food Total PPN 31.81 10.TABLE 18.06 131. 2003 represent half-yearly averages.73 121.21 3.

2 0.2 246.9 7.8 208.2 141.5 8.9 225.2 5.5 5.9 162.8 12.5 7.3 197 2 197.5 2.4 5.2 4.7 161 7 161.1 4.3 212.5 234.3 213.5 8.5 5.8 8.6 228.7 149.1 4.5 3.8 189.3 167.8 145 3 145.5 3.3 2.5 4.1 176.1 237.9 138.8 160.1 5.8 198.4 257.1 259.9 216.9 157. INDIAN WHOLESALE PRICE INDEX OF ALL COMMODITIES 1993-94 = 100 Period Year 1998 Index January February March April May June July August September October November December January February March April May June July August September October November December 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 134.5 6.3 152.0 238.2 186.8 169.5 6.3 162.4 146.TABLE 19.5 5.5 258.1 4.7 4.9 227.3 154 7 154.5 250.7 140 8 140.1 204.8 164.3 3.5 253.6 2. .7 209.3 4.9 3.6 188.7 3.6 6.3 161.1 8.1 3.7 208.3 207 8 207.0 6.5 1.3 139.5 4.1 136.3 7.1 158.5 1.4 4.6 167.3 6.1 167 4 167.6 153.5 212.8 179.6 173.3 6.3 7.9 145.5 5.2 241 5 241.7 4.4 3.0 241.5 247.0 158.4 2.2 6.7 142.2 1.5 228.8 167.1 193.5 2.5 231.4 196.9 176.5 1.1 4.4 5.8 140.8 180.2 10.8 6.3 4.3 3.4 4.5 4.3 11.7 175 6 175.5 4.4 191.7 7.6 5.9 5.7 6.8 161.5 159.6 195.9 158.1 5.2 188.6 188.7 159.5 5.7 179.6 134.0 6.8 4.2 162.4 167.0 8.9 5.3 6.3 5.2 228.0 146.4 12.0 234.3 203.5 8.9 4.1 161.1 3.6 147.1 3.5 3.8 143.8 211.2 1.4 158.5 173.5 7.5 6.3 5.2 194.0 3.4 6.3 2.5 142.2 6.2 215.4 196.5 4.8 1.6 6.2 197.3 7.6 192.7 3.1 5.8 188.8 12.2 140.7 3.1 2.6 176.7 178.3 1.2 5.7 4.7 4.3 4.4 173.1 146.5 1.3 5.8 Percentage change on the previous year 5.6 213.6 7.8 5.6 Source: Reserve Bank of India.9 3.7 160.6 196.4 188.9 7.2 197.4 6.6 8.5 5.0 205.4 1.5 5.2 231.6 242.5 6.3 5.8 199.8 5.3 3.2 142.5 6.4 173.2 161.6 4.1 185.9 190.3 142.5 167.4 240.4 151.8 4.4 161.1 11.0 160.6 2.1 215.6 6.0 6.4 240.4 189 4 189.2 10.7 -0.8 208.5 239.4 5.7 153.9 162.8 9.8 140.9 209.1 208.8 4.8 215 1 215.8 151.5 5.5 6.6 144.1 3.2 4.4 5.2 229.9 3.3 235.1 173.4 -1.6 134.9 143.0 201.2 5.0 5.0 -0.4 10.5 5.0 11.8 242 6 242.9 182.4 3.0 6.7 165.9 4.9 11.8 6.4 2.8 218.2 219.9 142.4 141.3 250.4 5.1 7.5 3.4 171.

935.5 -20.4 -5.801.5 -815.0 3.527.401.766.0 -3.647.220.4 1.5 7.9 -4.0 6.979.8 4.4 -1.0 2.694.562.059.562.2 710.7 6.242.1 -1.420.9 0.503.762.481.417.0 -11.9 2.8 137.4 1.0 -3.714.223.2 -1.065.474.9 -2.0 -4.4 1.5 3.8 -685.518.1 0.6 -237.0 2.5 9. Budgetary Grants Debit B.0 4.f Trade Balance Services Credit Debit Income Credit Debit Current Transfers Credit Of which.578.170.6 1.5 4.016.193.4 10.421.675.3 5.2 3.7 24.0 745.200. n o/w Other loans.0 2.2 25.3 761.2 1.8 5.3 4.2 363.219.0 5.3 -1.2 5.029.524.0 -19.603.198.816.8 1.5 273.8 -9.5 -23.157.7 0.424.9 -2.6 -2.527.460.015.754.5 4.252.5 783. net C.225.3 -37.496.072.8 4.9 -2.057.264.2 5.1 -9.780.106.957.1 -1.1 803.7 6.4 2.2 2001/02 -3.199.8 10.1 1.1 -1.095.313.215.0 2.719.322.457.3 -3.909.7 -2.730.146.2 547.2 3.2 -4.f Imports.206.430.6 7. Overall Balance 2000/01 -1.401.i.3 5.7 347.0 2.0 -4.0 5.1 2006/07 6.653.5 6.0 -1.1 1.7 -2.6 .215.5 1.886.3 -1.4 -2.941.244.9 3.8 -2.5 10.730.7 8.209.026.3 -10.700.252.465.i.5 5.5 813.8 561.442.9 -707.0 3.5 -2.751.310.5 0.0 0.5 0.2 -7.4 -903.258.8 -5.9 1.0 1.666.080.762.419.846.405.4 4.4 2.2 -1.8 -6.0 2.2 2.413.6 -2.7 -739.3 8.0 -3.1 6.5 1.769. Capital and Financial Account Capital Transfers* Foreign Direct Investment Portfolio Investment Other Investment o/w foreign aid (RGOB loans.864.0 2008/09 2009/10(p) -948.169.7 5.8 3.512.8 0.2 4.886.1 523.9 -3.0 -1.922.3 -1.2 2007/08 -1.111.851.492.1 2.8 3.8 -8.9 7.369.0 -881.923.0 977.994.1 3.085.242.5 -28.414.9 -4.597.704.033.271.1 -760.628.615.4 -2.2 -2.2 24.0 4.8 1.7 13.213.959.4 -2.1 6.980.092.1 5.2 5.139.012.3 2.6 3.015.9 -1.6 0. Net Errors and Omissions D.556.4 7.5 534.061.6 2.5 8.310.894.000.TABLE 20.0 -1.893.3 1.6 2.8 -27.533.0 0.900.4 89.653.864.1 4.753.847.661.3 5.795.1 370.072.3 1.790.519.686.6 436.1 20.3 -1.2 0.2 1.921.8 2.9 -3.313.2 1.028.091.177.6 4.9 0.3 1. Current Account Exports.954. OVERALL BALANCE OF PAYMENTS ESTIMATES Millions of Ngultrum Period Item A.125.4 -918.7 635.8 -544.4 5.3 2.3 -4.238.8 -39.575.0 -13.9 -4.0 4.414. c.3 4.4 -1.627.7 4.0 -323.0 -2.9 -11.6 6.2 236.552.3 -4.8 -312.749.0 157.7 2002/03 -6.613.8 -8.4 2.711.456.0 3.099.586.122. c.5 5.001.5 -1.101.939.7 101.657.0 -1.340.066.799.613.821.333.6 -1.846.310.175.0 -2.7 537.269.1 4.7 3.2 0.205.2 3.8 6.016.938.650.6 2003/04 2004/05 2005/06 -1.161.9 25.3 0.2 1.487.7 -573.3 118.941.308.4 401.695.1 1.0 2.0 117.

5 -1119.7 4076.8 1111.1 3420.9 482. Of which.6 0.5 1450.6 -2525.4 -2569.0 -701.1 -1211.9 1707.2 178.9 2512.2 543.0 -9353.5 -685.5 -28317.7 2004/05 -5253.3 5406.1 -12262.0 -1126.5 -642.7 -4933.3 -806.0 -2558.6 6439. BALANCE OF PAYMENTS ESTIMATES WITH INDIA Millions of Ngultrum Period Item A.0 2704.0 -1970.6 1459.8 23250.2 4186.5 -1339.0 642 0 112.0 0.2 416.9 886.5 -2841.2 -36.5 2551.9 1564.4 -3820.9 -2864.8 -1849.6 2005/06 -2344.8 -21749.5 -754.0 4700. Net Errors and Omissions D.4 490 4 195.3 -3062.0 8330.1 6219.1 4419.1 443.3 -1139.6 794.0 0. f.0 3719.3 -30. Capital and Financial Account Capital Transfers 1) 2000/01 -1906.0 1707.3 4377.1 -3224.6 3258. Current Account Exports.1 -784.1 1112.6 -23529.3 -450.3 9335.4 2569 4 72.0 2002/03 -7110.9 3181.6 -1786.9 -1323.0 -1590.7 6406.6 2222.1 -442.0 -7031.8 -2425.6 -27.1 -628.5 -7788.6 -2241.9 3417.4 4447.1 2007/08 -142.0 0.0 -1358.6 10610.7 2003/04 -5707.5 0.3 0.9 -2098.7 -3170.0 -30.5 635.2 2958.4 -3601. net) o/w Other Loans C.5 -2073.8 -568.6 3709.9 750.1 1853.o.6 -3911.9 2653.6 2001.i.2 5256.5 4160.4 2009/10 (p) -4002.TABLE 21. Punatsangchhu Trade Balance Services Credit Debit Income Credit Debit Current Transfers Credit Of which.7 -2654.0 -1341.4 0.7 -2664.6 2531.7 -278.2 3358.8 2949 8 18.0 2324.1 521.6 455.8 3990.0 0.8 31.5 4671.6 253. Imports.7 422.4 121.1 20911.2 0.7 1849 7 270.0 -955.3 938 3 181.5 Foreign Direct Investment Portfolio Investment Other Investment o/w Foreign Aid (RGOB Loans.2 55.3 -321.2 0.9 -2950.3 0.5 -381.5 -13781.2 144.0 0.6 -286.0 1951.0 1853.8 0.3 -3071.6 2006/07 5882.6 23383.4 162.2 6439.4 -1261.0 -1062.1 2905.7 -1654.5 4586.5 -2641.5 198.f.1 -1246.0 0.0 1413.8 -10589.0 1337.0 3258. Overall Balance .7 -33.6 -1203.8 1406.2 5095.8 -490.7 2287.2 -2610.0 4394.4 -502.9 2008/09 -1098.5 3163.1 -1341.5 18.1 -3088.9 5314.0 -16463.5 -658.6 2324.2 -1202.4 21721.3 1751.9 -1021.2 1032.5 3280.9 -1659.9 112.1 -2949. Tala Of which. c.0 -2182.3 -1122.2 -918.2 424.3 -9006.1 0.4 806 4 249.0 0.7 0.6 5072.2 -7.0 1863.4 -23.0 0.8 -2968.0 445.2 0.6 -938.0 3116.3 -1055.7 -2487.4 381 4 247.b.7 2628.5 4375.0 701 0 255.6 -938. Budgetary Grants Debit B.3 -1363.2 4024.2 1863.4 139.5 -333.0 0.3 -1653.8 1896.7 0.7 6768.1 -2665.0 -2358.8 2324.8 0.6 -2607.9 8661.0 7745.7 -91.0 3116.9 -2120.2 658 2 362.9 0.2 -1005.4 2001/02 -3137.

7 2.3 327.7 -125.1 0.7 2.6 1.7 -953.6 363.779.4 -1.424.0 819.0 157.3 2.977.9 0.001.0 3.0 -945.357.6 945.8 1.6 815.2 2009/10(p) -4.1 2.0 4.808.981.086.326.3 -864.1 307.6 1.9 2.6 294.9 3.130.264.0 983.9 -8.0 273.1 5.7 2.450.5 1.7 5.1 0.043.3 2.6 2004/05 -5.3 3.293.416.770.149.0 2.621. net C.616.4 1.3 7.1 2.5 553.0 2.340.2 -279.1 1.406.9 347.018.8 857.6 1.7 634.0 1.4 -414.5 -223.7 539.9 -788.8 1.030.1 1. Net Errors and Omissions D.976.7 -2.9 0.270.3 390.8 1.349.240.7 -137.534.9 -5.2 0.1 1.9 .686.496.869.001.9 3.979.8 0. Overall Balance 2000/01 -72.7 2006/07 535.180.9 499.4 -2.334.i.0 1.790.8 310.1 4.0 983.0 -658.022.4 296.1 1.8 1.6 -74.007.1 945.421.0 101.6 1.8 342.9 -638.198.1 1.6 2.3 2007/08 -937.2 -40.1 2005/06 648.1 1.2 2001/02 -756.0 0.3 -1.f Imports.3 -939.4 602.1 -609. BALANCE OF PAYMENTS ESTIMATES WITH COUNTRIES OTHER THAN INDIA Millions of Ngultrum Period Item A.5 0.2 2008/09 150.8 1.8 3.497.1 1.4 0.5 -2.4 -927.8 388.7 2002/03 512.893.5 1.106.445.5 -1.505.130.6 1.529.112.1 2.5 2.2 1.5 742.2 4.074.2 -381.4 579. Budgetary Grants Debit B.0 1.149.0 1.0 3.8 -1.8 1.0 0.385.7 -1.f Trade Balance Services Credit Debit Income Credit Debit Current Transfers Credit Of which.6 -37.6 439.1 602.4 388.5 795.8 1.643.310.947.322.6 1.3 -5.650.4 66. Current Account Exports.8 -209.3 113.8 862.959.0 710.1 1.707.0 -662.TABLE 22.3 0.5 471.9 -1.159.0 401.004.324.780.6 -880.5 -85.0 905. c.205.4 198.9 940.117.6 1.1 -120.7 -7. Capital and Financial Account Capital Transfers* Foreign Direct Investment Portfolio Investment Other Investment o/w foreign aid (RGOB loans.8 -6.0 0.6 1.4 273.4 0.6 355.3 -569.2 2.669.5 1.6 2.411.6 1.6 0.233.7 -4.580.0 117.0 314.3 0.659.338.049.449.2 0.0 0.405.5 1.2 -11.373.2 -445.7 -57.5 2.238.3 0.422.8 -9.469.0 0.0 989.4 230.5 -1.5 556.0 1.126.9 120.0 534.3 -2.0 -881.8 2.2 89.035.0 -281.812.4 -134.0 -783.3 -820. net) o/w Other loans.0 775.4 -1.8 3.8 253.014.3 -169.5 1.317.3 2003/04 188.230.3 0.407.6 -927.5 4.1 532.8 -720.8 813.0 3.0 142.8 1.0 0.0 1.8 1.2 -800.5 0.1 793.0 -1.411.7 238.641.0 -120. c.0 2.114.2 1.752.169.342.7 6.675.510.404.8 2.0 -5.210.i.084.277.0 803.081.8 0.176.2 490.443.6 -1.268.5 558.8 1.700.8 187.6 -1.

5 372.77 302.4 769.6 734.3 29.8 1822.9 7.3 628.6 17.7 287. RMA convertible currency reserves for 2004/05 onwards have been revised due to changes in classification as of May 2005.2 858.3 923.2 863.29 0.16 4.0 136.3 45.6 137.75 12.3 552.43 0.7 1507. Rupee reserves Royal Monetary Authority of Bhutan Bank of Bhutan Bhutan National Bank Tbank Limited Druk PNB Limited Millions of US Dollars 2.7 47.TABLE 23. From the second quarter of 2010.25 3.4 938. Note: Months of imports are calculated using gross international reserves and merchandise import figures (and excluding services).7 1079.7 1378.0 9.1 3127.4 1988. GROSS INTERNATIONAL RESERVES (*) Item Year 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 Millions of Indian Rupees 1.6 17.9 610.3 42.97 15.0 0.55 4. Total Reserves (1+2) 4. From March 2004.3 250.4 46.3 387.50 60.3 46.89 12.50 17.9 418.19 0.32 79.77 655.32 17.56 3330.4 373.0 281.6 16.3 50.4 43.82 2.02 (*) Includes reserve tranche position in the Fund.5 633.1 759.5 15.3 31.6 39.4 435.4 46.94 117.4 249.0 828.1 3578.3 7.37 12.0 196.3 2069.64 9. Trade figures for the last two years have been revised affecting the import cover of reserves. Total reserves Rupee reserves Convertible currency reserves 21.58 42.   . Convertible currency reserves Royal Monetary Authority of Bhutan Bank of Bhutan Bhutan National Bank Tbank Limited Druk PNB Limited 3.44 192.82 772.72 40.58 486.4 40.7 47.4 15.9 914.0 31. data includes that of the newly established commercial banks.4 429.4 245.79 0.72 383.1 118.1 Months of Imports 5.8 0.51 363.9 681.8 797.2 12.5 510.74 13.4 191. Exchange Rates 373.56 42.0 244.6 11.8 287.5 589.0 72. the definition of Gross International Reserves has been revised and backtracked to exclude RICBL's Rupee and Convertible Currency reserves.06 608.4 732.1 4362.6 1734.5 21.6 136.

8 0.066.5 4.2 353.955.126.0 6.3 385.7 2.0 2.8 0.7 557. Collectors' Pieces & Personal Effects 17 Miscellaneous Manufactured Products TOTAL 550.4 3.009.8 9 Textiles.8 0. Cereals.7 822.2 4.3 407.1 8.272.790.5 1.1 3. Mechanical/Electrical Appliances & Equipment and Parts 13.1 22.8 2.1 3.2 0.1 185.840.7 111.8 288.270. Footwear & Hats/Headgear 10 Articles of Stone. Grains & Seeds Animal or Vegetable Fats & Oils Processed Foods & Beverages Mineral Products inc.8 .6 311.507.2 516.8 251.1 7 8 8.099.5 976. Fruits.4 1.8 5.7 0.795.1 25.6 760.121.3 2.5 1.1 Magnetic Discs & Media 14 Transport Vehicles & Aircraft and Engines & Parts 15 Optical.0 15.2 131.5 684.3 11 Pearls and Products of Precious/Semiprecious Metal & Stones Base Metals and Articles of Base Metal 162.5 750.3 473.0 16.002. COMPOSITION OF IMPORTS FROM INDIA Millions of Ngultrum Sl 1 2 IMPORT CATEGORY Live Animals & Animal Products Vegetables.7 458.1 5.7 3.8 4.746.4 5.9 0.1 752.1 143.4 2.0 131.1 9.4 2.4 129.270.420.4 626.5 1.6 2.3 121.3 286.0 195.7 0.0 317.5 2.1 0.9 1.4 3.8 40.1 458.1 191.053.TABLE 24A.0 1.4 1.0 13.8 0. Tea.3 2008 776.5 111.0 679.9 356.2 19.0 100.8 92.1 Ceramic Products 224.322.1 120.0 3 4 5 6 6.2 119. Cinematographic & Measuring Equipment 16 Handicrafts.1 12 13 Machinery.221.7 305.2 62.3 4.996.5 2.7 2.0 146. Spices.9 1.4 596. Coffee.8 765.3 239. Ceramics & Glass 10.5 376.933.953.7 3. Photographic.8 260.8 2.9 12.5 306.7 1.2 78.3 839.8 561.5 2006 629.2 17.5 1.8 0.0 233. Cement.3 2.6 2.7 365.7 Share of 2009 Total in % (2009) 984.8 821. oils & fuels Products of Chemical & Allied Industries Medicine / Pharmaceutical Products 2005 567.5 480.9 132.1 0.1 639.339. Asbestos.322.5 251. Plaster.9 1.2 763.1 230.5 272.060.8 725.5 12.2 162.2 Plastic & Rubber Products Wood and Wood pulp products Wood and Wood Products Wood Pulp Products 368.2 1.7 823.290.8 2007 682.0 132.1 101.1 159.948.2 142.8 441. Nuts.0 257.1 0. Works of Art.

Tea.6 2.0 2.3 22.982.1 2.7 4.480.448. Spices.519.0 246.6 241.2 60.587.2 0.7 305.1 EXPORT CATEGORY Live Animals & Animal Products Raw Hides & Skins 2005 2.4 0.7 2. Grains & Seeds 243.5 307.032.6 7.3 275.9 0.1 0.380. Plaster.4 323.0 66.3 120.5 194.9 52.3 5. Footwear & Hats/Headgear 11 Articles of Stone.7 8.3 - 0.1 306.0 2 Vegetables.0 10.1 Processed Foods & Beverages Mineral Products inc.1 224.2 9.2 100.4 1.9 2.5 80.0 0.7 1.6 276. Collectors' Pieces & Personal Effects 17 Miscellaneous Manufactured Products TOTAL 787.1 318.9 1.0 444.0 587.6 7.415. Mechanical Appliances & Electrical Equipment and Parts 14 Transport Vehicles & Aircraft and Engines & Parts 15 Optical.439.1 10.302.0 292.3 481.3 2.0 1.0 31.2 14.050.8 0.6 257.5 1.6 893.1 149.491.3 0. Source: Department of Revenue & Customs.1 2006 10.2 25.2 51.1 22.3 783.4 1.3 1.072.6 314.4 24. Works of Art.4 11. Cement.875.1 22.1 Palm Oil 4 5 6 7 8 9 9.250.012. .5 Note: Electricity exports for 2002 and 2003 are taken from Chukha and Kurichhu sales for that year.9 1.2 44.0 0.6 2007 13. Photographic.7 1.1 4.0 0.9 39. Ceramics & Glass 12 Base Metals and Articles of Base Metal 13 Machinery.3 0.0 0.7 119.9 10 Textiles.4 0.8 476.1 6.0 16.4 31.8 1.1 Potatoes 3 Animal or Vegetable Fats & Oils 3.5 368. Coffee. Cinematographic & Measuring Equipment 16 Handicrafts.098.7 291.1 34.8 0. Fruits.TABLE 24B.9 714.3 0.0 122.5 3.9 113. oils & fuels Electricity Products of Chemical & Allied Industries Plastic & Rubber Products Wood and Wood Pulp Products Wood Pulp Products 389.3 - 606. Asbestos.969.723.4 9.9 4.6 214.8 605.0 1.0 31.6 2008 0.9 308.3 413.0 0. Cereals.6 0.2 983.488.809.161.8 21.7 401.8 276.5 14.9 4.5 1.034.6 11.0 0.9 3. COMPOSITION OF EXPORTS TO INDIA Millions of Ngultrum Sl 1 1. Nuts.7 138.6 0.1 Share of 2009 Total in % (2009) 4.7 3.

5 35.0 1.1 2.1 0.1 2005 2.4 17.4 5. Cereals.2 16. Tea. Mechanical/Electrical Appliances & Equipment and Parts 14.9 48.1 179.1 Plastic & Rubber Products Wood and Wood Products Wood Pulp Products Textiles.2 . Fruits.0 257.6 2006 2.6 9. Grains & Seeds Animal or Vegetable Fats & Oils Palm Oil (Crude & Other) Share of 2009 Total in % (2009) 7.6 495.8 34.6 5.6 1.3 28.7 1134. Ceramics & Glass Ceramic Products 240.7 94.4 20.1 377.5 36.2 14.0 1285.6 1577.4 105.0 264.5 32.4 485.7 5682.5 555.5 827.9 13.5 2.2 388.1 0.8 10.5 153.9 4.6 3. Coffee.2 157.4 20.7 301.7 6. Nuts.3 0.2 14.7 153.2 6155.7 0.8 0.1 31.1 2. Works of Art.2 114.1 149.8 151.4 6.3 8.5 15 Transport Vehicles & Aircraft and Engines & Parts 16 Optical. Asbestos.0 4 5 6 6.8 30.1 Processed Foods & Beverages *) Mineral Products inc.7 353.8 17.1 5958.0 0.3 4240.7 2.1 Magnetic Discs & Media (recorded/unrecorded) 13.7 18.1 7.5 0.0 47.5 110. Cement.7 136.3 44.8 0.7 1.3 173.4 449.4 276.6 1309.6 0.8 68.3 63.4 3.8 50.4 1.9 93.0 2007 3.7 158.8 25.5 483.7 97. Footwear & Hats/Headgear Articles of Stone.4 13.TABLE 25A.8 1580.9 10. COMPOSITION OF IMPORTS FROM COUNTRIES OTHER THAN INDIA Millions of Ngultrum SI IMPORT CATEGORY 1 2 3 3.3 0.6 4. Plaster.9 0.6 1782.3 0.0 49.7 55.2 40.9 1393.8 837. oils & fuels Products of Chemical & Allied Industries Medicines / Pharmaceutical Products 151.2 1689.6 0.4 6646.4 1212. Spices.3 5.6 109.3 97.0 0. Photographic.0 2102. Collectors' Pieces & Personal Effects 18 Miscellaneous Manufactured Products TOTAL 425.3 282.0 2008 12.5 22.1 28.8 2810.1 2.0 53.8 259.9 2084.9 100.1 865.9 164.7 44.8 0.3 38.9 12 Pearls and Products of Precious/Semiprecious Metal & Stones 13 Base Metals and Articles of Base Metal 14 Machinery.7 18.9 1.6 Live Animals & Animal Products Vegetables.2 7 8 9 10 11 11.1 0. Cinematographic & Measuring Equipment 17 Handicrafts.2 125.1 4.8 82.

8 141. Cement.9 16.7 2 3 3.2 0.0 43.8 619. Fruits.3 0.8 16.451.3 Processed Foods & Beverages Mineral Products inc.7 314.1 3.1 0.3 2.5 352.2 2006 284.0 0. oils & fuels Limestone & other calcereous stone Dolomite Bituminous Coal 5.7 0.5 15. COMPOSITION OF EXPORTS TO COUNTRIES OTHER THAN INDIA Millions of Ngultrum SI EXPORT CATEGORY 1 1.3 11 Base Metals and Articles of Base Metal 12 Machinery.2 0.4 4.5 68.7 0.4 1.1 3. tapes.6 3.0 4 5 6 7 8 9 10 Products of Chemical & Allied Industries Plastic & Rubber Products Wood and Wood Products Wood Pulp Products Textiles.2 29.628. Mechanical & Electrical Appliances.0 0.6 62. Spices.2 63.0 86.TABLE 25B.1 Recorded or Unrecorded media (discs.2 32.0 160.4 .1 0.3 4283.5 24.5 41.4 0.6 20.3 226.6 0.4 0.8 225.6 0.3 135.2 4.5 12. Footwear & Hats/Headgear Articles of Stone.0 0.0 4. Philatelic Products & Personal Effects 14 Miscellaneous Manufactured Products TOTAL Source: Department of Revenue & Customs.4 0.1 4.1 5.3 18. Equipment & Parts & Aircraft Parts 12.8 3.0 1416.6 0.8 9.6 0.2 57.0 3.0 0.6 2. Grains & Animal Products Oranges Apples Cardamoms 33.1 0. 2.1 1.0 0.3 1.7 48.0 Vegetables.5 22.1 270.0 6.3 0.6 2008 462.0 0.3 8.2 546.2 7.8 74.626.0 11.8 84.3 0.2 33.6 10.1 176.6 0.3 40.3 0.0 226.8 1110. Cereals. smart cards) 13 Handicrafts.8 2.6 249.0 38.5 5135.7 9.1 353.3 28. Plaster.9 0.0 49. Works of Art.5 0.2 3.0 0.9 76.7 39.4 125. Ceramics & Glass Articles of Precious/Semi-precious Metals 30.3 619.2 33.7 0.9 2007 284. Tea.4 13.452.0 0.7 284.2 39.3 2005 356.0 Share of 2009 Total in % (2009) 523.9 79.5 0.2 1.6 1.1 4. Asbestos.2 0.2 619.0 2.8 1558.7 4.1 139.7 0.9 0.8 50.5 28.7 49.4 3.7 2.8 28.6 22.1 3.

2 0.0 Poland UAE United States 0.9 598.5 1.6 2.8 844.4 1.0 2006 14.0 100.8 1.5 Total 100.5 3.9 351.7 75.8 558.5 8.5 744.6 27.109.0 1.7 0.4 5.4 374.6 410.1 2.6 23.8 23.7 8.0 15.0 Share in percent Exports India 93.6 2.2 15.3 240.1 5.248.7 410.795.572.431.5 25.9 1.1 0.5 2.053.8 677.331.193.701.339.2 1.5 459.3 1.0 4.2 76.0 Sweden 1.7 2.9 964.4 22.9 447.6 6.745.3 275.0 8.1 17.0 0.1 0.4 36.9 644.3 2.TABLE 26.5 0.6 462.4 2.5 257.0 0.4 195.0 100.2 1.7 285.0 100.099.7 275.1 1.4 2008 21.2 2007 22.9 12.7 68.0 100. DIRECTION OF TRADE * Millions of Ngultrum Item Exports India Bangladesh Nepal Hongkong Japan Poland UAE United States China Maldives Others Total Imports India Japan Singapore China Thailand South Korea Germany Indonesia Sweden Malaysia Others Total 2004 7.0 77.7 11.1 0.8 247.6 2.8 10.3 240.5 460.2 281.2 395.988.8 2.1 0.3 0.2 9.9 0.7 24.8 4.0 938.866.0 1.0 244.872.4 4.9 2.6 100.3 21.1 205.723.2 515.7 469.5 125.2 100.488.1 19.7 China 1.0 Maldives Others 0.1 3.1 0.0 95.9 0.9 Bangladesh 5.4 0.7 23.0 93.9 1.3 1.4 1.1 Singapore 2.1 3.7 402.6 501.8 105.1 0.4 1.2 420.0 632.8 0.5 2.2 193.829.4 South Korea 2.8 0.9 7.1 Indonesia 0.1 12.3 349.2 3.0 487. *By latest year rankings.3 0.0 84.1 2009 22.1 10.9 383.973.7 224.2 2.6 1.2 4.5 0.2 Japan 0.1 0.4 18.8 561.8 4.1 0.7 1.7 100.9 8.8 286.306.1 100.1 57.1 1.913.6 0.0 157.7 176.4 2.764.4 1.590.0 Source: Department of Revenue and Customs.4 2.3 80.724.0 470.1 182.5 758.6 1.9 Malaysia 0.3 53.7 1.415.1 0.7 1.6 17.7 17.969.3 2.035.6 87.0 18.012. 81.5 11.0 0.7 174.7 4.0 0.0 .4 15.6 54.7 11.9 648.031.3 348.0 China 0.0 Total 100.6 0.5 Thailand 1.840.0 0.761.0 1.495.0 0.8 0.8 44.6 1.4 65.0 0.1 1.639.7 Japan 3.2 0.1 68.0 69.2 21.4 1.8 306.5 2005 9.522.0 0.0 73.2 1.0 100.9 Others 9.0 1.9 19.3 Hongkong 0.9 6.8 1.4 Germany 22.9 1.7 207.4 1.3 66.8 4.0 15.1 1.5 Nepal 0.1 6.480.0 6.8 685.3 99.4 7.1 0.7 9.1 1.4 0.1 10.7 100.288.858.8 222.098.0 1.5 0.0 18.8 17.4 200.0 3.1 1.1 13.4 1.0 Imports India 54.9 1.8 1.4 200.9 0.

3 0.9 0.0 0.6 4. CONVERTIBLE CURRENCY AND RUPEE LOAN DISBURSEMENTS (*) Sector Creditor Concessional and Publicly Guaranteed Debt Agriculture 1st Eastern Zone Agricultural Proj.6 4. ADB Dev.8 0.1 10. Education Second Education Proj.0 6.0 0.6 8. Marketing Entp.0 0.0 0.4 3.0 11.7 11.4 0.0 0. Road Improvement Project Rural Telecom Net.9 World Bank World Bank ADB ADB Govt. IFAD 2nd Eastern Zone Agricultural Proj.8 0.3 0.of Denmark ADB ADB World Bank ADB World Bank 6.4 89.0 0.2 2008/09 USD Rupee 2.7 0.3 0.0 0.7 1.0 0.4 0.4 5.3 10.2 7.4 0.0 3. Proj.7 0.1 39.0 0.4 9.5 3.1 7.1 0.TABLE 27.9 19.2 0.0 1.0 0. Road Network Project Urban Infrastructure Dev. Program (b) ADB Financial Sector Dev. Proj.0 0.0 3. Urban Development Proj.0 4.0 0.0 0. Urban Infrastructures Improv.0 0.9 7.1 0.0 0.0 0.9 72.0 6.0 0.6 2009/10 USD Rupee 3. Health Financial Sector Financial Sector Dev.9 1. Strengthening World Bank Industry 2006/07 2007/08 2005/06 USD Rupee USD Rupee USD Rupee 0.4 0.0 3. Expansion Proj.3 0.4 0.8 0. Proj.1 8.9 0.9 0.5 0.0 0.4 33.0 0.0 0.6 1.0 0.0 0.0 0.0 Total1 USD Rupee 48.8 13.000 0.8 8. Basic Skills Dev.0 0.2 11.0 0.0 10.0 1.8 7. IFAD Agri.0 0.0 0.6 2. Education Development Proj.3 0.0 12.0 0.0 0.5 0.3 1.8 0.7 0.6 11. Proj. & Promotion Prog.8 0.7 10. IFAD Communications Rural Access Proj.0 0.0 10.0 0.0 0.0 2.0 2.0 0.8 4.0 14.8 7. Policy Financing for Inst.0 5.0 0.0 0.7 1.6 2.4 8.3 16.2 0.0 .2 0.9 0.9 1.9 0.6 35.

6 4756.0 0.0 0.0 29. Chukha Hydropower Proj Proj. of India Govt.0 0. of India SBI Total (Concessional and Publicly Guaranteed Debt) Other Loans2 TOTAL (Publicly + Non-Publicly Guaranteed Debt) 243.0 6590.9 4.8 461.0 2.2 7132. of Austria ADB ADB Govt of India Govt. 2) Includes private sector debt on non-concessional terms.0 0.3 Sector Power Sustainable Rural Elect.6 0.4 9.0 00 0.6 13. .0 2376.7 2008/09 USD Rupee 0.0 4756.8 0.3 24566.0 0.8 11924.3 32. Other Decentralized Rural Dev.2 3321.6 4.9 0.0 23.6 494.0 0. (Special Operations) Dagachhu Hydroelectric Proj.6 2240.0 3590.0 0.0 0.9 0.7 00 0.0 0.0 00 0.0 16742.3 983 6 983. Govt.2 2376.0 0.0 0.4 2599.2 2.7 0.TABLE 27.0 1745.0 2.4 3869. 2) Projects listed include those with active disbursements in the past 5 years. Basochhu Hydropower Proj.8 Total1 USD Rupee 94.2 8335. Rural Electrification & Network Exp.0 40.0 0.2 7132.5 2009/10 USD Rupee 19.0 1.6 71.December 2009.0 29.0 139.5 29.3 00 0. of India World Bank Govt.2 0.0 0.0 1745. Proj.0 0.5 1.2 15532.2 8335. of India Govt. Proj.3 2599.0 1.7 243.5 40099.5 0.0 0.9 4.1 40099.0 3000.0 20.4 3869.0 0. CONTINUED CONVERTIBLE CURRENCY AND RUPEE LOAN DISBURSEMENTS (*) In millions of USD and Rupees 2005/06 2006/07 2007/08 USD Rupee USD Rupee USD Rupee 7. Tala Hydroelectric Proj.9 1) Total Disbursements are cumulative from 1981/82 .0 29.9 00 0.7 480.8 1.2 1.7 243.0 0.1 3250.GOI SBI OD Facility Creditor ADB ADB Govt.0 0.0 2599.0 2.8 40.3 2599.1 4601.0 0.1 3250. Basochhu Hydro. Kurichhu Hydropower Proj.0 0. Proj.0 619.0 14.0 0. Project Standby Credit Facility . of Austria Govt.3 0.3 0.2 1.5 2.0 0.7 9.0 0. Lower Stage Green Power Dev.7 35. Punatsangchhu-I Hydroelectric Proj.0 243.9 20.7 0.0 0.0 23.7 14.0 71.

11 0.06 0.05 0 04 0.04 0.08 0.04 0.09 0.18 0. 0.45 Agriculture 1.00 2008/09 USD Rupee Interest Interest Principal Principal 0.00 1.00 0.10 0.11 0.00 0.02 0.22 0.09 0.08 0.07 0.01 0. Proj.01 0.99 0.01 0.02 0.10 Punakha Wangdi Valley Dev.10 0.04 0.23 0.22 0.05 0.04 0.13 Chirang Hill Irrigation Proj.00 0.12 0.04 0. 0.11 0.07 0.23 0.00 Urban Development Proj.YEAR WISE EXPENDITURE ON EXTERNAL DEBT .14 0.04 0.12 0. 0.03 0.04 0.02 0.05 0 04 0.07 0.24 East West Highway Maintenance 0.12 0.03 0. 0.55 Communications 2.04 0.05 0.TABLE 28. 0.53 0.05 0. 0. 0.54 2.00 2.31 0. DEBT SERVICING .00 Urban Infrastructure Dev.09 0.05 0. Proj. 0.08 1st Eastern Zone Agricultural Proj.05 0. Proj.00 0.18 0. Proj 0.03 0.00 .01 0.05 Road Network Proj.13 0. Marketing Entp.05 0.05 0.82 0.02 0.59 0. CONVERTIBLE CURRENCY AND RUPEE (*) 2007/08 USD Rupee Interest Interest Principal Principal Sector Concessional and Publicly Guaranteed Debt 0.10 0.00 0.03 0.02 0. 0.16 0.15 0.12 Urban Infrastructures Improv.44 0. Proj.00 1. Proj Proj. 0.00 Road Improvement Proj.16 0.02 0.01 0.07 0.00 0.00 Forestry I 0.11 0.03 0. 0 06 0.66 2.00 Rural Telecom Network Exp.02 0.04 0.00 2009/10 USD Rupee Interest Interest Principal Principal 0.12 0.09 0.71 0.04 0. 0. & Promotion 0.36 1.21 0.41 Rural Access Proj.01 Highland Livestock Dev Dev.09 0.19 0.01 0.03 0.08 0. 0. Proj.05 0.17 2nd Eastern Zone Agricultural Proj.11 0.00 0.00 Road Works Mechanization Proj.02 0.04 0.03 0.02 Forestry III 0.20 Forestry II 0.10 Small Farm Dev.15 T/gang Mongar Dev.04 0.23 Agri.00 0.12 0. 0.00 0.08 0.12 0.04 0.

Proj.00 0.00 0.05 0.22 0.09 0.00 0.28 0.19 0.23 0.00 0. Bhutan Dev. Basic Skills Dev.37 0. Proj.07 0.00 0.00 0.00 0. Bhutan Calcium Carbide Ltd. Policy Financing for Inst.03 0 12 0. Finance Loan Proj.49 0.00 0.00 0.00 2008/09 USD Rupee Interest Interest Principal Principal 0.37 0.YEAR WISE EXPENDITURE ON EXTERNAL DEBT .TABLE 28.08 0.00 0. Gedu Wood Mgf.00 0.02 0.11 0.05 0. Multi Project II Education Development Proj.00 0.05 0.65 0.05 0.05 0.00 0. CONTINUED.00 0.04 0.01 0.06 0.12 0.11 0.01 0.53 1.01 0.05 0.18 0.00 0. Proj.27 0.10 0.24 0.18 0.00 0.03 0.31 0.00 0.02 0.30 0. Industrial Estates Dev.02 0 11 0.06 0.10 0.00 0.00 0.05 0. Project Dev.00 0.06 0. DEBT SERVICING .04 0.00 .47 0.05 0.03 0.01 0.12 0.11 0.11 0.08 0.29 0.00 0.09 0.00 0. Health Health Care Reform Program Financial Sector Technical Assistance Multi Project I Bhutan Dev.06 0. Technical and Voc.21 0.10 0.14 0.05 0.12 0.08 0.29 0.02 0.05 0.00 0.28 0.98 0.05 0.00 0.44 0.00 0.25 0. Corporation Tala Particle Board Factory Proj.18 0.03 0.46 0.00 0.09 0.08 0. Train.29 0.12 0.04 0.06 0.04 0.12 0. Program (b) Dev.05 0.12 0.03 0.23 0.00 Sector Education Primary Education Proj.00 0. 0.04 0.09 0.02 0.12 0.00 0.65 0.00 2009/10 USD Rupee Interest Interest Principal Principal 0. Finance Corporation Financial Sector Dev.60 0.10 0.30 0.00 0.16 0.02 0 12 0.00 0.10 0.56 1.00 0.09 0.02 0. Finance Corporation Financial Sector Dev. Strengthening Industry Bhutan Calcium Carbide Ltd.00 0.70 0.10 0.00 0.31 0. CONVERTIBLE CURRENCY AND RUPEE (*) 2007/08 USD Rupee Interest Interest Principal Principal 0.03 0.69 0.09 0.16 0. Edn.00 0.26 0.00 0. Program (a) Financial Sector Dev.02 0. Second Education Proj.03 0.70 0.00 0.

0 0.17 1395.86 1295.00 0.11 0.12 0.36 39.55 0.17 0.86 1395. TOTAL (Publicly + Non-Publicly Guaranteed Debt) GRAND TOTAL (I+P) Source: Department of Public Accounts and private sector enterprises. Punatsangchhu-I Hydroelectric Proj.00 87.00 0. CONVERTIBLE CURRENCY AND RUPEE (*) 2007/08 2008/09 2009/10 USD Rupee USD Rupee USD Rupee Interest Interest Interest Interest Interest Interest Principal Principal Principal Principal Principal Principal 2.75 0.99 2697. Dagachhu Hydroelectric Proj.06 188.39 1.TABLE 28. Sustainable Rural Elect.22 1.00 1.00 0.00 0.00 0.21 1548.00 0.73 1.00 1027.43 8.45 0.38 Sector Power Rural Electrification Proj. Standby Credit Facility . 1) Includes private sector debt on non-concessional terms.00 0.00 0.0 0. Other Decentralized Rural Dev. DEBT SERVICING .85 0.00 0.00 0. .64 6143.64 4213.67 1295.00 47.92 0. CONTINUED. Proj.027.11 0.27 0.00 40.11 0.01 0.67 186 67 186.70 5795.19 0.69 201.YEAR WISE EXPENDITURE ON EXTERNAL DEBT .52 4.84 0.00 201. Chukha Hydropower Proj.80 1581.00 3.22 1548.00 0.03 47.00 1.83 1.21 4245.00 0.48 9.08 0.17 1395. (lower) Basochhu Hydropower Proj.88 0.76 0.00 0.52 3.03 100.00 0.44 1598.43 8.92 20.75 0.14 7.67 186 67 186.64 0.00 0. (Special Rural Elect.85 1.00 0.01 0. Bhutan Ferro Alloys Ltd.05 0.62 5795.17 8.44 7481.00 0.69 0.75 0.48 11.84 0.47 1497.00 4561.18 0.24 1.69 186 67 186.69 201.21 1.06 0.08 0.92 5.68 7741. Proj.0 0.19 0.00 0.14 8. (*) Totals may not add up due to rounding.00 4.69 60.43 0.03 0.49 6143. Rural Electrification & Network Exp Basochhu Hydropower Proj.03 0.00 0.61 1686.0 0.00 0.00 0.00 0. Tala Hydroelectric Proj.00 4213.00 0.00 1. Proj.19 1598.66 12.24 0.23 2697.52 149.21 14.00 0.56 1.00 0.16 0.82 1686.00 1.62 0.00 0.35 1.89 1581.0 1.00 0.GOI SBI OD Facility Total (Concessional and Publicly Guaranteed Debt) Other Loans1 Loan for purchase of DAC Plane Bhutan Resorts Corp.22 1.15 0.62 1497.37 0.86 1295.08 0.0 0.75 4561. Ltd.08 0. (upper) Green Power Proj.37 4. Kurichhu Hydropower Proj.56 6.04 1500.20 1.27 0.62 1.84 2.17 7.14 0.75 1669.18 0.58 0.

2 218.8 8.287.4 0.7 87.9 117.680.5 36.1 24.628.0 15.602.120.8 42.2 7.3 4245.7 2.2 50.2 209.306.9 Source: Department of Public Accounts.0 1.6 16.0 4.497.5 1.4 1.5 1.777.9 6143.5 1598.7 2.244.0 3.9 87.9 2.874. RUPEE DEBT INDICATORS Millions of Indian Rupees Year 2000/01 Debt Outstanding Chhukha Hydropower Project Tala Hydroelectric Project Kurichhu Hydropower Project Punatsangchhu .7 0.4 39.TABLE 29.1 9.9 1.9 0.9 274.866.240.6 20.3 1.GOI SBI OD Facility Debt Service Payments Principal Interest Debt Service Ratio (%) Interest Payments/Export of Goods & Services Principal Repayments/Exports of Goods & Services Debt Outstanding/GDP (%) 5.9 2.285.2 31.0 3.0 2003/04 14.0 1.6 1.1 87.5 483.0 12.3 274.1 1548.6 1.3 350.493.500.7 1.6 525. .2 1686.4 32.1 2.3 2005/06 18.8 112.2 11.3 7481.4 0.400.2 0.6 2.6 29.8 2.1 487.0 13.8 46.556.5 19.3 87.225.6 25.0 2007/08 18.3 492.8 262.0 53.3 480.0 12.6 33.847.0 2009/10 22.6 2.222.1 51.4 7.9 3.7 108.4 0.8 274.1 16.000.951.8 2.2 213.4 2.632.948.7 14.7 437.4 612.3 5.7 1.5 0.0 2001/02 7.078.369.4 3.5 1.000.2 175.3 34.0 2002/03 10.7 2006/07 18.2 87.7 5.4 5795.240.3 2.3 30.963.4 38.3 7741.400.7 2697.358.053.0 917.6 1.8 26.I Hydropower Project Standby Credit Facility .0 2004/05 16.2 2.346.3 1.984.2 2008/09 21.7 6.601.1 121.603.0 1.

9 3.3 8.0 15.8 5.9 43. FOREIGN DEBT INDICATORS FOR CONVERTIBLE CURRENCY LOANS Millions of US Dollars Items Debt Outstanding Debt Service Payments Principal Interest Debt Service Ratio (%) Interest Payments/Convertible Currency Exports of Goods & Services Principal Repayments/ Convertible Currency Exports of Goods & Services Debt Outstanding/GDP (%) Period 2000/01 2001/02 2002/03 2003/04 129.9 2.8 9.0 4.1 3.7 345.6 11.0 5.5 368.6 5.7 3.7 9.0 15.0 4.6 1.7 1.4 8.5 10.4 12.0 30.6 8.8 2004/05 2005/06 2006/07 302.1 5.0 4.3 6.3 18.2 26.1 31.8 12.6 28.6 5.5 3.6 2.5 20.6 308.9 3.8 8.2 34.4 11.8 30.3 4.9 2.0 4.5 43.3 23.3 22.2 13.1 12.0 5.2 16.5 2008/09 346.0 46.3 9.7 237.4 7.7 14.5 4.1 9.0 294.5 3.6 Source: Department of Public Accounts & private sector companies. .7 8.9 3.1 10.2 2.0 2.5 5.5 73.4 6.4 2009/10 352.6 10.8 19.0 2007/08 349.0 47.7 7.TABLE 30.1 2.

0 13.180.1 26.3 1.6 - -915.092.9 17.5 11.4 7098. (1) Includes lending to public and joint sector corporations.3 26.837.5 6.7 1.2 4.425.8 9.381.5 1.3 -150.3 1.218.3 126.068.6 2.958.2 -175.9 4.092.0 5.2 4.5 -4.000.170.2 739.266.373.1 16.7 2.5 -4.579.723.4 4.5 31.1 15.501.003.061.5 5.4 5.7 657.024.104.027.5 10.9 -1.2 10.671.090.007.8 -374.6 2.5 5.3 16.614.5 530.316.350.4 53.107.905.2 13.566.725.238.7 318.4 2.8 403.2 3433.264.289.774.482.7 61.2 2.5 16.1 1.Dept of Public Accounts (Figures may not add due to rounding).090.770.146.683.748.7 Source.1 30.443.2 124.187.893.0 1.1 7.082.575.815.143. Negative financing transactions depicts net repayment of borrowings or increase in cash or bank balances.801.4 715.452.1 8.net of principal repayment (2) Financing transactions by definition must equal the budget deficit or surplus on revenue/grant/expenditure which they finance.423.805.083.4 9.0 3.2 3.5 -1.0 Total Revenue Tax Non-tax Others Grants From India Others Total Revenue and Grants Expenditure (1) Current Capital (1) Budget surplus or Deficit (-) Financing Transactions (2) External borrowings (Net of Principal repayments) Internal borrowings (Net of principal repayments Cash and bank balances (3) Others 6.4 8.411.417.392.4 4.672.7 287.867.5 4.976.778.7 -287.4 7.0 6.9 2. .1 10.625.3 -175.9 4.9 6.2 4.6 35.392.4 7.9 6.4 7.361.0 -55. SUMMARY OF BUDGETARY OPERATIONS*/ Millions of Ngultrum Year 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 (revised) 15.8 567.676.935.772.2 2010/11 (estimates) 15.394.TABLE 31.7 6.9 5.7 8.4 11.5 31.of overdraft.9 6.6 10.6 -318.6 6.154.913.7 15.0 18.424.451.1 2.9 33.140.6 23.1 12. (3) Includes use + or repayment .691.2 3.869.805.5 -403.128.277.7 -2.6 -642.1 -1.937.124.0 22.7 3.795.818. Others: other receipts.382.837.4 6.3 0.6 13.1 4.6 12.4 16.4 10.

2 0.2 4.7 62.0 42.0 11.0 8.0 259 RICBL 2006 96.0 206.5 314.0 NA NA NA 300.0 NA NA NA 100.0 20.1 6.0 49.0 46 2008 150.9 81.8) 100.4 4.2 196.0 NA 550. in Mill BCCL 2006 100.2 477.3 7.5 108.0 550.3 2.0 100.0 489 1993 2007 140.5 4.1 463.0 1.5 156.8 34.2 25.5) (0.0 NA 170. in Nu.0 10.6 86.3 70.2 63.0 25.0 9. (%) (ROC) 600.2 792.2 20.3 304.7 110.2 3.0 21.7 237.0 0.0 5.9 162 BDL 2006 14.0 NA 140.7 100.9 670.0 650.1 466.1 787.2 140.0 293.5 494.6) (0.0 29.5 0.5 46.9 162 2009 20.2) (0.9 164 1994 2007 20.0 673.0 350.0 600.2 (1.0 30.7 214.0 44 BBPL 2006 140.1 (27. THE ROYAL SECURITIES EXCHANGE OF BHUTAN LTD.0 40.0 128.9 303. Mill.0 264 1993 2007 100.0 14.418.3 148.6 20.0 15.5 141.0 7.5 0.0 NA NA NA 429.2) 336.0 298.0 1.1 765.3 0.8 447.0 10.0 124.2 1.5 23.5 52.0 2.2 38.0 NA NA Market Profits Reserves Book Earnings PE Dividend Return Dividend Capitalization Nu.5) (2.0 299.5 0.2 16.0 4.0 100.5 553.6 11.0 259 2009 100.5 0.1 14.2 1.0 15.7 3.8 67 1995 2007 3.6 489.0 NA NA NA 120.0 491 2009 140.2 9.8 7.5 2.556 PCAL 2006 226.3 40.0 NA 140.686. Mill.0 1.3 349.0 NA NA Low 6.0 14.2 79.9) (41.8 23.556 2009 240.1) 825.5 566.9 16.0 13.1 7.3 550.TABLE 32.1 0.2) 100.3 (0.5 52.2 759.9 100.9 6.1 196.7 .2 70.6 25.2 480.0 4.0 NA 100.9 94.1 0.8 2.7 144.1 50.471 2008 340.3 9.7 825.0 10.2 71 2008 6.2 5.of Year of Capital Year shareholders Listing Nu.0 0.482 1993 2007 226.0 67.5 30.0 0.1 298.0 4.1 96 2008 96 2009 96 DPCL 2006 6. Nu. in Value Per Share Ratio Yield on Capital (%) Nu.0 25.6 96.0 2.8 3.0 350.0 (88.813.0 510.9 571.2 4.1 (29. Nu.8) 100.8 100.0 5.9 5.0 800.614 1993 2007 96.1 13.6 0.0 800.6 100.0 NA 510.0 4..8 NA NA 0.550.4 15.4 2.7 0.3 32. INFORMATION ON LISTED COMPANIES Company*/ Paid Up Reference No.0 NA 300.2 71 DSML 2006 3.5 (0.7 1.0 (2.4 464.472 2009 340.8 67 2009 3.0 1.6 437.0 90.2 35.8 67 2008 3.586.3 185.7 0.000 NA 800 900 350.3 5.0 429.3 2.2) (8.8 0.1 96 1994 2007 14.7 53.0 33.2 336.7 323.0 46.5 470.3 15.3 435.0 NA 100.0 120.9 0.0 7.0 13.8 441.0 264 2008 100.2) (10.0 2.2 140.2 583.0 1.2 0.0 4.8 0.6 11.0 1.0 75.4 75.1 7.0) 7.1 0.0 106.0 0.0 600.0 NA 100.5 55.9 15.5 1.0 10.0 370.3 765.9 0.0 11.8 0.0 (191.3 0.2 10.0 429.1 14.8 21.3 0.0 429.0 278.3 0.1 100.4 409.0 100.1 729.0 (48.4 16.2 (88.7 90.0 119.5) 16.6 395.2) 377.7 284.0 1.3 1.7 0.0 500.0 1.0 800.0 181.585 2008 96.9) (0.000 NA 800 900 300.0 492 2008 140.0 52.6 2.0 350.0 491 BTCL 2006 20.6 3.0 NA 301.0 9.0 92.1 141. in Mill.7 0.2 5.7 3.462 BFAL 2006 150.6 60.7 0.5) (1.0 NA 100.0 187.3 14.0) 100.2 35.0 32.7 5.1 800.9 15.0 46 1995 2007 150.0 44 2009 150.2 71 2009 6.2 71 1995 2007 6.5 350.3 15.7) (0.0 6.5 15.0 NA 170.3 15.9 3.5 100.0 800.3 63.9) 14.0 23.9 164 2008 20.1) 14.3 321.0 (211.0 8.7 686.8 67 Market Price (Nu) High 6.7 5.2 7.7 1.4 20.0 900.

0 18. CONTINUED THE ROYAL SECURITIES EXCHANGE OF BHUTAN Ltd.9 24.2 32.4 26.5 36.1 75.9 24.3 74.1 0.0 101.5 25.0 8.3 4.2 0.5 9.5 0.496.2 0.4) 0.0 11.0 200.0 119.0 35.5 362.0 100.5 5.0 20.0 40.9 4.0 1.8 477.0 20.5 355.0 300.9 36.0 40.7 7.440 4.1 24.0 64.2) (15.0 80.6 283.0 805.0 11.374 129 129 129 128 125 125 125 125 1.1 4.7 38.0 NA NA 100.9 24.2 (0.6 8. in Value Per Share Ratio Yield on Capital Year shareholders (%) Listing Nu.4 5.4 58.0 NA 650.5 0.0 400.9 2.1 25.357 4. in Nu.0 15.9 156.5 32.1 1.1 72.7 45.3) (2.2 137.3 3.0 16. (%) (ROC) BNBL 1996 2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2006 2007 2008 2009 119.0 100.4 15.1 0.8 1.2 0.0 77.0 16.0 10.0 100.9 100.9 24.7 87.8 249.9 1.7 12.0 Delisted 52.0 NA NA 100.0 140.5 24.9 2.4 692.092 1.0 20.5 29.0 3.0 140.8) 42.5 40.2 44.0 NA 190.7 45.1 32.3 156.0 20.0 Na NA 190.2 0.422.0 20.0 30.1 (2.6 46.334 1.277 1.0 NA NA 220.5 7.0 20.3 266. in Mill. in Mill.8 100. High Low Nu.0 133.0 805.0 100.0 38.082 750.0 275.4 144.9 37.9 858.0 35.5 362.3 18.5 9. Mill.0) (78.6 17.5 310.8) 214.7 10. Nu.4 3.3 191.0 100.1 705.0 15.9 2.7 933.9 196.0 33.7 2.5 103.0 115.0 NA NA 190.8 306.8 131.0 NA 190.0 15.0 161.2 0.0 100.3 8.4 26.1 7.2 212.7 55.0 NA NA 100.8 2.7 105.0 112.1 3.1 0.0 100.8 76.0 5.9 10.8 4.9 24.0 30.2 0.0 100.3 (17.2 0.2 0.0 236.2 0.7 2.089 1.0 10.1 1.5 15.276 1.0 0.1 2.0 52.7 45.2 33.3 272.279 213 213 213 213 4.3) 0.0 200.2 0.1 52.0 50.0 45.1 52.0 500..0 35.8 31.0 300.0 25.6 5.0 355.3 52.0 10.5 241.9 24.7 3.3 9.5 78.of Dividend Year of Capital Capitalization Nu.4 (11.0 2.0 124.7 10.3 15.0 190.TABLE 32.0 9.2 0.0) (0.0 25.7 35.0 15.8 124.3 0.9 20. INFORMATION ON LISTED COMPANIES Company*/ Paid Up Market Profits Reserves Book Earnings PE Dividend Return Market Price (Nu) Reference No.9 2.5 6.5 136.4 200.0 272.0 28.0 30.7 24.1 60.0 16.082 1.0 0.0 10.2 0.4 8.6 82.0 6.0 7.5 189.3 2.0 38.0 115.0 10.0 137.5 BPCL 1997 STCBL 1997 DSCL 1998 DPOP BBCL 2002 EBCC 2005 .7 3.277 1.5 10.4 0.0 10.0 NA 773.0 38.0 635.0 19.582 4.6 958.8 229.6 902.8 0.1 52.0 100. Mill.8 75.3 12.5 408.5 28.098. Nu.0 100.0 10.7 209.3 7.0 137.0 45.3 0.8 58.6 7.0 7.8 18.0 190.1 245.9 38.1 209.

0 100. Nu.432 366 100. Mill.0 (8..0 9.. EBCC-S.0 NA 100.0 800. DPCL-Druk Petroleum Corporation Ltd.0 163.0 340. INFORMATION ON LISTED COMPANIES Company*/ Paid Up Market Profits Reserves Book Earnings PE Dividend Return Market Price (Nu) Reference No. BFAL-Bhutan Ferro Alloys Ltd.2) 10.1) 0.2 20.2 68.9) 90.0 12.5 286.0 9.2 5. (Delisted in 2007).0 100.KCL-Kuensel Corporation Ltd.0 NA 105.8 4..2 (45.8 10. Nu.1) 3.9 110.0 42.0 163. BPCL-Bhutan Polythene Company Ltd..0 NA 100.DWAL-Druk Wang Alloys Ltd.7 0.4 42. in Mill.JMCL-Jigme Mining Corporation Ltd. PCAL-Penden Cement Authority Ltd.0 28. DSML-Druk Stones and Minerals Export Company Ltd.Bhutan Carbide and Chemicals Ltd.6 40.9 (18. in Nu.0 70.1 (0. of Shares.5 79. STCBL-State Trading Corporation of Bhutan Ltd.4 100.TABLE 32..8 (5.5 4. BBCL-Bhutan Beverages Company Ltd.. Formula used : 1.0 (24.9 20.0 12.2 12. Mill..4 290.0 194.0 NA 100..0 50.0 100. BTL-Bhutan Times Ltd.0 194. 3-PE = Market Price/ EPS.6 7. DFAL-Druk Ferro Alloys Ltd.3 (28.6 104.5 0.2 4.6) 7.0 40.3 100. BTCL-Bhutan Tourism Corporation Ltd.2 95..4) 3. DPOP-Druk Plaster and Chemicals Ltd.1 131. in Mill.3 40.0 253 233 233 504 507 426 418 288 289 4.BIL-Bhutan Insurance Corporation Ltd.2) 0.0 194.of Dividend Year of Capital Capitalization Nu.0 50.6 3. of Shares..4 (7. CONTINUED THE ROYAL SECURITIES EXCHANGE OF BHUTAN Ltd.0 650.0 100.D Eastern Bhutan Coal Company Ltd.0 50.4) 223.0 167.0 100. High Low Nu...2 281..0 100.3 13. BBPL-Bhutan Board Products Ltd.0 120. RICBL-Royal Insurance Corporation of Bhutan.7) 32. BNBL-Bhutan National Bank Ltd. 4-Return on Capital = Net Income/ (Equity + Reserves). .8 0.3 (3.0 227.0 (0. DSCL-Druk Satair Corporation Ltd. (*) BCCL .2 (0.3 103..0 10.0 9.Book Value = Capital + Reserves/ No.5) 3. (%) (ROC) KCL 2007 DWAL 2008 JMCL 2008 BTL 2008 BIL 2009 DFAL 2009 2007 2008 2009 2008 2009 2008 2009 2008 2009 2009 2009 50.0) 63.0 (12.0 105.0 100.3 342...3) Source: Royal Securities Exchange of Bhutan.0 8.2 185.0 100.7 93.0 4.8 7.0 50.0 70. in Value Per Share Ratio Yield on Capital Year shareholders (%) Listing Nu..4 277. 2-EPS = Net Profit/ No..0 NA 105.0 0.0 8.0 100. BDL-Bhutan Dairy Ltd..0 7.0 Na 50. 5-Dividend Yield = Dividend X 100/ Book Value Per Share.1 0.

63 43.54 43. IMF.32 2003/04 Fiscal year average 45.02 43.94 45.46 45.10 45.64 44.92 44.02 42.76 43.13 43.73 40.51 39.13 42.44 39.33 44.03 42.26 51.66 49.49 43.19 2008 39.63 43.36 40.41 46.78 2009/10 46.35 2006/07 44.78 40.34 39.27 45.85 44.TABLE 33. .68 43.16 44.64 45.61 2006 44.15 40.74 2007 44.33 45.58 43.74 43.10 2004/05 44.46 46.83 49.78 45.37 39.47 44.50 44.57 46.48 44.50 45.31 2005/06 44.51 2007/08 40.84 42.12 45.40 44.06 46.25 45.82 40.34 46.56 Source : International Financial Statistics.63 48.37 2009 48.77 48.34 48.56 48.82 42.95 45.98 45.77 40.41 2008/09 47.65 2010 45.73 45.04 46.23 50.41 40.44 41.51 46.33 44.93 45.44 46.41 2005 43.96 46.82 45.72 46. EXCHANGE RATE.69 43.53 47.00 48.48 48.81 46.06 48. NGULTRUM/US DOLLAR Period Average Year Period Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Calendar year average 2004 45.54 46.

04 2006 115.84 108.14 106.16 99.48 92.38 91.61 2009/10 91.92 Source : International Financial Statistics.54 104.62 121.86 2005 103.92 104.52 109.14 2009 90.45 117.74 111.35 117.45 95.76 2006/07 118.73 122. .01 108.90 103.14 92.81 109.68 91.58 120.90 106.61 114.TABLE 34.63 111.75 100.33 96.87 120.36 106.77 90. Additional Source: Bank of Japan Website.36 110.02 115.66 117.52 93.72 115.74 91.31 117.29 2010 91.25 117. JAPANESE YEN / US DOLLAR Period Average Year Period Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Calendar year average Fiscal year average (+) 2004 106.22 2004/05 107.25 112.64 110.66 107.12 124.91 108.31 107.56 95.82 118. EXCHANGE RATE.19 2003/04 110.00 96.36 110.11 111.36 2007/08 110.47 109.28 106.28 118.67 115.59 116.09 86.30 2005/06 114.28 90.60 92.51 106.53 115.94 104.62 107.01 118.45 117.50 98.16 90.72 111.06 114.94 110.79 102. IMF.21 112.55 108.13 116.76 89.40 2008/09 98.32 103.88 117.41 118.16 100.89 117.88 105.96 2007 120.52 2008 107.

770 0.785 0.816 0.675 0.834 0.734 0.782 0.819 0. EURO/US DOLLAR Period Average Period Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Calendar year average Fiscal year average (+) 2004 0.721 Source : International Financial Statistics.791 0.732 2010 0.822 0.644 0.819 2005/06 2006/07 0.788 0.768 0.714 0.797 2007 0.776 0.680 2009 0.816 0.630 0.786 0.849 0.766 2009/10 0.740 0.645 0.TABLE 35. IMF.788 0.758 0.710 0.801 0.731 2008 0.731 0.740 0.824 0.843 0.804 2004/05 0.686 0.696 0.769 0.755 0.793 0.832 0. EXCHANGE RATE.685 0.755 0.838 0.734 0.701 0.681 0.752 0.757 0.755 0.840 2005 0.767 0.634 0.703 0.781 0.805 2003/04 0.815 0.783 0.668 0.701 0.687 0.745 0. Additional Source: European Central Bank Website.671 0.773 0.679 0.793 0.720 0.765 0.758 0.814 0.734 0.822 0.746 0.796 0.729 0.678 0.831 0.720 2008/09 0.832 0.791 0.815 0.682 2007/08 0.821 0.826 0.787 2006 0. .635 0.748 0.736 0.834 0.

IV. ANNEXURES .

to further encourage competition among FIs. the RMA introduced the reserve repurchase in September 1996 as its second debt instrument. the RMA removed the “spread”. In 1993. and inspect their operations. In April 1999. Until 1997. RMA discount bills were introduced as an instrument of central bank policy. In March 1988. In 1984. In line with the Government’s program of liberalizing trade and industrial policies. the RMA liberalized interest rates with effect from October 1997. thereby providing insufficient flexibility to financial institutions for setting their rates on the basis of the actual cost of funds. by holding the bulk of government deposits. To enhance competition in the banking sector. The system allowed each institution to determine its own deposit and lending rates. The aim is to eventually move towards current account convertibility. the cash reserve ratio was introduced for the purpose of liquidity control and for prudential purposes. • • • • • • • . the RMA started its actual operations. With effect from April 1. whenever necessary. In 1983. For the purpose of further improving the RMA’s liquidity management. removing various restrictions on foreign exchange transactions.ANNEX I CHRONOLOGY OF MAJOR FINANCIAL SECTOR DEVELOPMENTS • • • • In August 1982. the RMA Board approved the new Foreign Exchange Regulations 1997. the RMA Act was passed by the National Assembly during its fiftysixth session. 1983. and foreign exchange operations. called Bhutan National Bank in January 1997. the RMA took over the issue of the national currency. The RMA organized the establishment of the Royal Securities Exchange of Bhutan in 1993 to begin a small capital market for the purpose of facilitating public participation in the holding of securities of public and private companies. Since this arrangement was not conducive to the long-term growth of the financial sector and the economy. permitting more competition and interplay of the market forces. the RMA took over the additional function of banker to the Government. In November 1992. liberalizing fully the interest rates on both deposits and advances. the Financial Institutions Act was passed by the National Assembly to provide the RMA with the legal framework to issue licenses for financial institutions and to regulate. and to provide means for financing the Government. the management of external reserves. when it was discontinued. while maintaining an overall interest spread of a maximum of six percentage points. interest rates on both deposits and advances were directly administered by the RMA. allowing each institution to determine the rates in accordance with the “spread system”. the Unit Trust of Bhutan was converted into a full-fledged commercial bank. supervise. The repurchase was rolled over until January 2002.

a new organization structure for the RMA became operational. DMD I. Of particular importance is the creation of the positions of Deputy Managing Director I. Furthermore. a Monetary Operations Committee (MOC) was established in June 2002. the asset allocation. a Reserve Management Committee (RMC) was established in May 2005. the RMC is responsible for advising on the existing currency composition. who is responsible for the Policy and Programs Department. the Government Employees Provident Fund was transferred in 2000 from the Royal Insurance Corporation of Bhutan (now RICBL) to the newly created National Pension and Provident Fund. • • • • • • • • . Apart from the implementation of the investment guidelines approved by the Board and the MOC. the RMA made arrangements with the Reserve Bank of India to participate in the auctions of Government of India securities to invest Indian Rupee reserves. 2004. who is responsible for the Operations Department.ANNEX I • Check clearing facilities were established in the country (the first in Thimphu in 1997 and the second in Phuentsholing in 1999). For the purpose of dealing effectively with that problem. respectively and in December 2005. in order to provide an efficient system through which the country’s commercial banks could settle their claims against each other for checks and other negotiable demand items. One of the causes for sluggish credit activity in the country has been the inadequate legal framework for loan recovery and the high collateral requirements. please see Annex I. DMD II. As part of the RMA’s external communication policy. being commensurate with the requirements of an effective central bank. The facilities are also envisaged to enhance the payments and settlement system through the use of negotiable instruments. 2004. For more details. and the management of the country's reserves. On behalf of the Board. Gelephu extension office was converted into a full-fledged branch. and returns on the portfolio by studying the evolving outlook on the international currency markets and the asset market trends. As part of the Financial Sector Reform Program. the MOC will basically be responsible for the formulation and implementation of policy instruments. On August 24 and December 8. BNB has opened new branches in Paro and Mongar. 2004. In 2002. and Deputy Managing Director II. For the purposes of streamlining reserve management. in order to provide legal support for the check clearing houses and the use of negotiable instruments in the payments and settlement system. the Negotiable Instruments Act was passed in the 78th session of the National Assembly in July 2000. its website was made available in August. the government passed in 1999 the Moveable and Immovable Property Act and the Bankruptcy Act. Following a resolution adopted by the RMA's Board of Directors. the achievement and maintenance of sound conditions in the financial sector. With effect of July 1.

). 2006 in Thimphu. As of September 2009. The NPPF formally came under the purview of the RMA on March 9. Nepal and Sri Lanka attended the meeting. 2008 and the Bumthang branch on November 2. internet and mobile banking.ANNEX I • To mark the International Day of Micro-credit. the BOBL has also undertaken major upgrading its stand-alone technology platform to a centralized Core Banking Solutions (CBS) network. Its Wangdiphodrang branch office was inaugurated on April 19. 2008. The fourth South Asian Insurance Regulators Forum (SAIRF) meeting was hosted by the Royal Monetary Authority of Bhutan on April 10. 2009. In December 2008. to open on August 19. UNCDF and SNV on 6th April 2005. and T Bank Ltd. eight branches are already on the Flexcube CBS and the rest of its branches. the Bhutan Development Finance Corporation Limited launched a new saving scheme for the rural farmers in collaboration with the UNDP. while also introducing ATM facilities. In line with the objective of promoting the development of the financial sector in the country. the BOBL was also the first bank to introduce internet banking facilities on May 28. To improve its quality of service and enhance customer convenience. 2009 throughout Bhutan. and opened a counter in Bumthang and Wangdue. Punakha to cater to the insurance needs of the people and the upcoming Punatsangchu hydropower project. 2009. including 16 manual branches will be online with the CBS technology by the end of 2010. 2009. Several dignitaries from India. On August 17. RMA issued a license to Bhutan Insurance Ltd. the RMA issued in-principle approval (IPA) to two commercial banks (Druk PNB Bank Ltd. providing 7 days services to its customers. The Royal Securities Exchange of Bhutan Ltd. launched its website in September 2009 under the ADB Financial Sector Development Program. The in-principle approval is valid for one year wherein the proposed financial services providers have to fulfill the requirements of the IPA and be ready for commencement of business. 2008. In March 2007. to carry on nonlife insurance business. 2007. and an insurance company (Bhutan Insurance Company). The RMA granted approval to Royal Insurance Corporation of Bhutan Ltd. the RMA granted approval to the Bhutan National Bank Limited to open its branches in Wangdue and Bumthang. • • • • • • • • • • . the BOBL introduced Sunday banking services from November 30. the RMA was appointed as the implementing agency for “Strengthening the financial sector through IT investments” under the World Bank Private Sector Development Project. On November 18. During 2008. The BIL officially commenced business transactions from August 20. 2009 an extension office at Lobeysa. Up-gradation of its technology has enabled the BOBL to introduce convenient delivery channels such as SMS equiry. the BIL established its branch office in Paro and Phuentsholing.

2009. H. and international organizations in Bhutan. On September 14. 2010. The T-Bank Ltd. financial sector. their role and responsibilities. the RMA issued a commercial banking license to T-Bank Ltd. Subbarao. On March 10. Hon’ble Finance Minister and Dr. On March 1. 2010. The Launch was attended by the Asian Clearing Union (ACU) members. On December 5. officially commenced its business on February 27. The RMA held the formal launch of the Electronic Fund Transfer and Clearing System (EFTCS) on June 11. members from the RGOB. with the objective to educate the public at large on the services provided by different financial institutions. 2010. The RMA. RMA issued a commercial banking license to Druk PNB Bank Ltd. formally commenced its business on March 12. Lyonpo Wangdi Norbu. Microfinance Regulations. a FDI joint venture bank. the RMA accorded approval to the BNBL to convert its extension office in Trashigang to a full service branch office. 2010.. 2010.E. D. • • • • • • • • • . Corporate Governance Regulations. 2009. the rights of the clients of the FIs while doing business with the them. to enhance access to banking services. 2009. 2010. Thimphu. The Royal Monetary Authority Act of Bhutan 2010 was formally enacted during the 5th session of Parliament on June 2. and to also to improve the public’s understanding of the financial sector. Branchless Banking Regulations. 2010 and established its first branch in Phuntsholing on February 7. in collaboration with the financial institutions in Bhutan. The launch was inaugurated jointly by the Chairman of the RMA Board. the RMA granted a license to the BDFCL as a specialized deposittaking commercial bank. 2010. The RMA initiated the drafting of Regulations on the Establishment of Commercial Banks and Insurance Companies in Bhutan. On December 22. 2009. Meanwhile. the BDFCL inaugurated its vendors’ outreach banking branch office at the Centenary Farmers’ Market. 2010. the T-Bank Ltd. excluding foreign exchange transactions.ANNEX I • • The RMA launched Bhutan’s first Credit Information Bureau and the RMA Integrated Central Banking System on September 9. carried out a Financial Literacy Education Program and Awareness Campaign from March 15 – 24. the RMA has also granted approval to BDFCL to establish branches in Dorokha and Nganglam. Bhutan’s first issue of the RGOB Treasury Bills was auctioned on December 14. Its license will allow the BDFCL to engage in depository banking. Governor of Reserve Bank of India. set up its branch office in Phuentsholing. Anti-Money Laundering Regulations and the Establishment of Reinsurance companies in Bhutan. Druk PNB Bank Ltd. 2010. on January 19.

the RMA gave approval to the BDFCL to establish branches at Samdrup Jongkhar. Dagana and Samtse districts. On September 20. 2010. His Majesty the King appointed the Managing Director of the RMA Daw Tenzin. 2010.ANNEX I • • On August 18. Sarpang. as the country`s first Governor of the Central Bank. .

BNBL. and information on the National Pension and Provident Fund and the Royal Securities Exchange of Bhutan. these services reduce vulnerability and enable people to manage the assets available to them in ways that generate income and optionsultimately creating paths out of poverty (Christopher N. As of June 2010. the assets/liabilities of the financial institutions in Bhutan grew by 28. 1971. NPPF. is the oldest and largest financial institution in the country. Albeit developing. Druk PNBL. while 60 percent were held by the RGOB. the finance. BOBL. 2007). SBI held 40 percent of the bank's shares. This section provides brief background information and overview of developments that have taken place in the financial sector1 during the FY 2009/10. established on May 28.5 billion. with the collaborative efforts of the Royal Government and the stakeholders of the domestic private sector. the RGOB collaborated with the State Bank of India. saving and investment. the management of the bank was handed over to the Bhutanese with a corresponding reduction in SBI’s shareholdings to 20 percent. Banking. BANK OF BHUTAN LTD. while enabling businesses to start up. (SBI) on October 7. In 2009.50.9 percent to country’s GDP.. Bhutan’s financial sector played a fundamental role in promoting economic growth and development in the recent years. with SBI participating in the capital and management of the bank. and debt and equity financing help private citizens save money. Besides its core central banking and regulatory functions. guard against uncertainty. In 2002. Throughout. 1 BDFCL. and compete in local and international markets. For the poor. the RMA also accorded high priority to the education of the general public on financial literacy and promoting financial inclusion. to establish the BOBL. BIL and RICBL. increase efficiency. the Royal Monetary Authority of Bhutan has placed high priority on the development of Bhutan’s financial sector through intensifying ICT and upgrading payment and settlement mechanism. including detailed institutional-wise developments. and build credit. Please refer to Annex VIII for a more in-depth review of the performance of Bhutanese financial institutions. insurance and real estate sector collectively contributed 8. Jenkins. insurance.ANNEX II DEVELOPMENTS IN BHUTAN’S FINANCIAL INSTITUTIONS Finance is considered as the lifeblood and nerve center of a business. The RGOB represented by Druk Holding and Investments (DHI) holds 80 percent of the bank's shares. of this. expand. T-Bank Ltd. Sutton and Beth. almost 90 percent belonged to commercial banks and remaining 10 percent to non-bank financial institutions (NBFIs). In order to encourage monetization of the economy and improve banking services in the country.8 percent to Nu. 1968. (BOBL) The Bank of Bhutan Limited. . A thriving financial sector is an important driver of macroeconomic development and therefore also key for poverty reduction.

In 1989. the BOBL has also encouraged employees to undergo Masters Programs in Thailand. which regularly conducts feedback surveys to monitor customer satisfaction levels. deposit mobilization. eight branches were running on the Flexcube CBS. will be linked to the CBS technology by the end of 2010. besides inducting professionals with legal. At present. the bank conducted door-to-door surveys in rural areas to introduce lending and deposit schemes to the rural community. identifying areas for new initiatives in corporate and international banking. In 2008.000 customers. To improve the quality of its human resources. internet and mobile banking for overall customer convenience and satisfaction. In recent years. The bank also introduced a Customer Helpline to assist clients during regular banking and non-banking hours. human resources development at the BOBL has been accorded great priority. Furthermore. BOBL has constructed a USD 1 million.ANNEX II Over the years. the BOBL initiated social sector targeted loan schemes (viz. As of December 2009. the bank started contributing to the earnings of foreign exchange by financing and facilitating export transactions. in addition to introducing ATM. Thereafter. From 1975 onwards. engineers from the College of Science and Technology. Philippines. doctoral and human resource specialist backgrounds. A 5 Year Business Plan has been initiated. With the up-gradation of its technology. the BOBL has initiated campus recruitment drives to recruit top academic achievers from Sherubtse College. The conduct of Employee Satisfaction Survey and Employee Care Project are some of the recent initiatives of the bank. To improve its services and customer convenience. the BOBL has also completed due diligence and has signed an agreement on the GTFP (Guarantee Facility) with the International Finance Corporation (IFC). the first of its kind in Bhutan.000 to 20. Sunday Banking services were launched on November 30. Similarly. . Similarly. BOBL has an established network of 26 branches and 3 extension counters with only 12 of the branches on stand-alone systems and the rest on manual ledger systems. This is part of the BOBL’s revised service rules and 10-year HRD Master Plan. BOBL entered into a series of arrangements with foreign banks. and Malaysia. the bank undertook the major task of upgrading its stand-alone technology platform to a centralized core banking solutions (CBS) network. education. ladies plus and pensioners) and increased its loan base from 6. 2008. The BOBL plans to harness ICT to achieve the bank’s strategic outcomes by extending its services and enabling greater organizational effectiveness. Customer satisfaction is being accorded highest priority at the bank. state of the art data centre. in an attempt to improve its banking culture. the BOBL introduced customer education in rural areas on its services. and was also the first bank to introduce internet banking facilities on May 28. and follow-up on loans. and the rest of the branches including 16 manual branches. which will facilitate faster remittances to India. Coinciding with the Centenary and the Coronation celebrations. the bank has introduced multi-city cheque facilities with the help of its strategic partner. providing 7 days services to its customers. TierIII. in 1986. the SBI. in order to better serve the country’s growing needs for banking services. BOBL was able to introduce convenient delivery channels such as SMS and mobile banking. 2009 in the country.

and thereafter converted its Gelephu extension office into a full-fledged branch in December 2005. With the overall goal of deepening the financial system to generate broader and competitive banking services. in December 2004. while the loans and advances of the bank increased by 20.95 percent.1 percent. the bank will be taking initiatives to establish a Data Recovery Centre and plans to expand ATM connectivity to all its branches in Bhutan. and marketing. the RGOB.200 million in 2008 to Nu. Moreover. which has enabled the ASEAN tourists to use the card for purchasing merchandise/services in Bhutan.7 billion in 2008. 1988 with assistance from the ADB.1 billion in 2008 to Nu. the BOBL (3. Its main sources for funds are external concessional loans and grants from international agencies.5 percent). Bhutan Trust Fund 9. and the BNBL (1.25 percent).6 percent.6 percent of the total share capital of the bank. Currently. The general public holds 38. and Bhutanese individuals travelling abroad. BNBL upgraded their software. BHUTAN NATIONAL BANK LTD. NPPF holds 25. and the RICBL 2.7 percent. The capital of the bank has increased from Nu.24. and equity participation of the RGOB (93. 1996. it started functioning as an independent financial institution to promote and mobilize small domestic savings. such as credit card. the RICBL (1. (BDFCL) BDFCL was established on January 31. the DHI and SBI. the BNBL has installed 10 ATM machines across its branches in Bhutan.200 million by its shareholders. businessmen. The BNBL provides ATM facilities in Thimphu and Phuentsholing. in order to be able to provide modern banking facilities. converted the UTB into the Bhutan National Bank on December 5. In January 2003. BOBL also plans to launch the VISA International Card.1 billion in 2009. BNBL established a branch in Wangduephodrang and Bumthang and also converted its extension offices at Samdrup Jongkhar and Trashigang into full-fledged branches. In 2008.1 percent.5 percent). branding. internet banking.9.1 billion from Nu. and ATM services to their customers.75 percent). and to channel capital to productive sectors in the economy.7 percent from Nu. the bank expanded its network by establishing branches in Paro and Mongar. BHUTAN DEVELOPMENT FINANCE CORPORATION LTD. New products and services including the Gold Visa International Credit Card. ADB 10. jointly owned by the RGOB and the RICBL. In 1992. (BNBL) The Unit Trust of Bhutan (UTB) was established in 1980 as a division of the RICBL. . the BNBL launched the Global Credit Cards. In the later part of 2004. including the UNCDF. The bank recently launched the Master Card which is expected to promote effective banking transaction of tourists. Debit cum ATM card and SMS banking were also introduced in the recent years. through a capital injection of Nu.400 million in 2009. with assistance from the ADB.11. the total assets of the bank increased to Nu. During the year 2009. which can be used for both local and international transactions. the Royal Government 13.ANNEX II credit card services.16. Further.

after obtaining its banking license. the BDFCL continues to emphasize the implementation of its Group Guarantee Lending and Saving Scheme (GGLS) program piloted in 2002.153 million) is held by the Punjab National Bank. along with all assets and staff of the former Agricultural Credit Division of the RMA. which opened its first office at Thimphu on March 2010.20 million. The DPNBL opened for business in January 2010. particularly. To finance small entrepreneurs. was transferred to the BDFCL in March 1988. IFAD. In October 1998. TASHI BANK LTD. The principal goal was to assist small farmers to increase production and income. the BDFCL issued Nu. agricultural. with the remaining 40 percent floated to the public through an initial public offering (IPOs). (T-BANK LTD) The T-Bank is Bhutan’s fourth commercial bank. the BDFCL joined the Entrepreneurial Development Program (EDP) initiated by the RGOB. constitutes its primary function. holding a total of 60 percent of total share holding (20 percent each). of which 51 percent (Nu. BDFCL is funded by international multilateral agencies. SDC. 19 percent (Nu. which was initially implemented by the RMA. fixed and saving deposits during the first quarter of 2005.ANNEX II HELVETAS. its share in the EDP is Nu. the BDFCL now functions as a domestic commercial bank with cheque facilities. The T-Bank Ltd. With the introduction of mobile banking facilities at the grassroot level. while agricultural lending. the BDFCL launched the two saving schemes. it launched a recurring deposit scheme. is a local bank with three domestic promoters. primarily to assist the private sector by providing financial and technical assistance for industrial. and ultimately improve their quality of living. Industrial lending activities dominate the BDFCL's activities and profitability. (DPNBL) The Druk Punjab National Bank Limited is the second foreign direct investment bank in Bhutan since the establishment of the BOBL. and beginning 2008. micro-financing. and commercial projects. It was set up. BDFCL is registered as a company under the companies Act (2000).57 million) by its domestic promoters. The T-Bank established its first branch office at Phuentsholing on September 14. DRUK PUNJAB NATIONAL BANK LTD. The BDFCL has a nation-wide branch network that covers all 20 districts and 5 subdistricts.50 million worth of 10-year rural credit bonds for the purpose of providing micro-credit to rural borrowers. and . KFAED. targeted at assisting the rural poor.300 million. In addition. 2010. the institution reduced interest rates of its rural credit group loans from 13 to 10 percent with effect from August 1. As of March 2010. 2004. The ongoing UNCDF/IFAD agricultural credit program. 2 sub-branches and 3 regional offices in the country. with 29 branches. with a total capital of Nu. marking the United Nations International Year of Micro Credit 2005. and the ADB. In line with the resolution of the 82nd National Assembly on the reduction of the interest rate on rural credit from 13 percent to 10 percent.

.ANNEX II the remaining 30 percent (Nu. it helped to resolve the longstanding problem of excess liquidity and enabled the corporation to concentrate on its core business. ROYAL INSURANCE CORPORATION OF BHUTAN LTD. besides investment and real estate.1. It was subsequently incorporated under the Companies Act of Bhutan 1989 and licensed under the Financial Institutions Act of Bhutan. In this connection. Under the Royal Charter. the mandate of the RICBL is to underwrite all types of insurance business emanating from Bhutan and engage in investment activities. Right from its inception. With the investment of these funds in the economy. As of date.2 billion (accounting for over 80 percent of the RICBL's assets). the RICBL is using an Integrated Insurance Management System (IIMS) for the general and life insurance system. 2010. housing construction and transportation activities in the country were taken up by the private sector on a large scale. and other towns were financed by the RICBL. the DPNBL has a workforce that comprises of 42 Bhutanese and four other staff (including the CEO) from the Punjab National Bank. was transferred to the NPPF from April 2000. which was managed by the RICBL since 1976. the RICBL also invested in the development of industrial units and trading activities. Its main lines of business are categorized into life insurance and non life insurance. Instead. while managing rural insurance and private provident funds for private individuals. Phuentsholing. The RICBL operates on a fully computerized financial and operational system under the local area network system at its head office. armed forces and the monk body. The GEPF. India. its Credit and Investment Department was set up to act as an investment body for effective and efficient utilization of funds from insurance and Government Employees Provident Fund (GEPF). the separation of the GEPF did not have adverse effects on the overall performance of the RICBL. including the Health Insurance Scheme-I. Besides housing and transportation loans. The corporation is also in the process of developing a new system for its Credit and Investment Management department under an Integrated Credit and Investment Management System. Some of the major initiatives undertaken by the RICBL during the year 2009/10 included the following: • Introduction of several products in the general insurance business. the RICBL has not only risen to meet the insurance needs of the country. Currently. with 61 percent government participation and 39 percent public participation. The DPNBL opened its first branch office in Phuentsholing in February. (RICBL) The RICBL commenced its operations as the country’s first and only insurance institution in 1975 under Royal Charter. The corporation also manages the general insurance scheme (GIS) of the civil service. However. when the company had to part with assets worth Nu. but has also contributed towards the country's economic development by facilitating financial assistance to private individuals. Almost 75 percent of the houses/buildings in Thimphu. 1992.90 million) floated to the public in its initial public offering (IPOs).

commercial insurance. The ADB project and the RGOB working committee in 1999. Delegation of authority to underwrite insurance business and claim settlements at RICBL branch offices. with the remaining 60 percent of its shares held by 4. the royal government initiated a formal old-age income security scheme by restructuring the GEPF scheme aimed to provide: • • • • Post service retirement benefits to its members. Social support to spouse(s) and dependent children in the event of the death of a member. Promoting human resource development within the RICBL. Currently. which will benchmark the minimum requirement performance of RICBL employees.434 shareholders. (BIL) The Bhutan Insurance Ltd (BIL) was incorporated under the Companies Act of the Kingdom of Bhutan. Thereafter. Identification of risk management as a key tool to effectively manage the insurance business. Development of corporate key performance indicators. 40 percent of the BIL’s share holdings are held by its domestic promoters. and liability insurance. 2002. with three additional branch offices and two extension offices in the country. Up-gradation of the company’s information technology. and Compulsory savings plan for salaried employees. Expanding marketing channels through the recruitment of sales executives and establishment of branches and micro branches across the country. Therefore. NATIONAL PENSION AND PROVIDENT FUND (NPPF) Prior to the establishment of the NPPF. Income security in the event of permanent disability. industrial insurance. 2009. which were paid as a lump sum after retirement. The headquarters of the BIL is located at Thimphu. BHUTAN INSURANCE LTD. based upon which employees’ performance incentives shall be designed. such as the Micro Insurance Saving Scheme. 2000 on July 24. The BIL offers all types of non-life insurance services including personal insurance. under the governance of the National . to enhance customer service. in order to enhance social security. multitiered retirement plan called the National Pension and Provident Fund Plan (NPPFP). the BIL has a total staff strength of 32 employees. the GEPF was managed by the RICBL and covered only government employees. under the governance of the Board of Directors. the royal government formally established the National Pension and Provident Fund as an autonomous body on July 1. Its benefits were limited to a gratuity and a provident fund scheme.ANNEX II • • • • • • • Leverage on life insurance business as a source of funds for investment business through the introduction of new products. reviewed and evaluated the UNDP's study (1997) on the "Feasibility of Introducing a Pension Scheme in Bhutan" and recommended an annuity-based.

393 members. cash. the NPPF came under the purview of RMA with effect from July 1.222 to 42. Management Information System (MIS) and ABS reporting tools. and provision of an extending option to avail of lump-sum or monthly pension from 10 years to 20 years for civil servants. 2007. the NPPF plans to develop an in-house Inventory Management System (IMS).512. the NPPF has plans to implement the National Electronic Clearing System (NECS) which will be used to disburse pension payments and staff salaries. At the end of June 2010. 2000. SMS messaging. is a defined benefit plan under which monthly pension benefits will be provided to a member upon retirement and in addition it also provides disability benefit to a member and benefit to survivor (s). titled Tier 1 of the NPPFP. installation of a hotline service. computer telephonic interaction system. The NPP. including the setting up of the one-stop solution.73 million compared to Nu.587.ANNEX II Pension Board. realizing the importance of investing its assets in a prudent manner the NPPF was licensed by the RMA to carry out limited financial services on March 9. and real estate assets. growing by over 5 percent during the review year. the NPPF membership increased from 40. To ensure that members’ funds were safeguarded.2 billion in the form of fixed deposits. and the opening of dedicated counters at BOBL in Thimphu and Phuentsholing. Increase in the retirement pension benefit to a maximum of 40 percent of final salary. Further. but linked tiers: the National Pension Plan (NPP)2 and the Provident Fund Plan (PFP) On July 3. Operationalization of the Credit Information Bureau System. The latter system is expected to greatly improve the quality and efficiency of service delivery for pensioners. The NPPF consists of two integral separate. Major developments that took place during the year 2009/10 included the following: • • • Increase in the pension contribution of civil servants from 8 percent to 11 percent of the basic salary. Implementation of the Ascend Banking System (ABS). thus making it the largest institutional investor in the country. Meanwhile. 2007. 2 .98 million in 2008/09. and achieved considerable progress on the operations of the civil and the armed forces pension and provident fund plans. as it generated gross revenues amounted to Nu. the NPPF took over the GEPF and real estate operations from the RICBL. FY 2009/10 marked another successful year for the NPPF. on the investment and credit front. Improvements in the service delivery system. More recently. • • In addition to the above. worth Nu.

123 shares valued at Nu. were licensed to serve as brokers. Its initial paid up capital of Nu.m. Transactions in the secondary market also grew both in terms of volume and value. Ever since the exchange commenced operations in 1993 with four listed companies and a total market capitalization of Nu. 1992. the brokerage firms.851 in 2008 to 17. i. Since the volume of trading is relatively low. and the CEO of the RSEBL as member secretary. linked through a local area network on the trading floor. (RSEBL) The RSEBL is regulated under the Companies Act.30. at 11 a.132. the chairpersons of the four-brokerage firms.393 million. Department of Industry. the number of listed companies has now grown to 21 listed companies with a total market capitalization to over Nu. The RMA’s role is that of a Securities Commission.04 million in 2008 to 261. from 77. Ministry of Economic Affairs.ANNEX II ROYAL SECURITIES EXCHANGE OF BHUTAN LTD.8 billion. a Central Depository (CD) was established along with the RSEBL. Director. and licensed under the Financial Institutions Act.2 million was provided by the four FIs whose subsidiary units.654. .3 percent of the outstanding shares of all the listed companies. The CD currently holds 99.e. The trading system of the RSEBL runs through an automated system. the exchange conducts trading only twice a week.4 million as of 2009. the total number of shareholders increased from 12.983 shares valued at Nu. Its board of directors consists of the Governor of the RMA as Chairman. to eliminate delays in the registration of physical transfers of shares and to ensure the safety of such documents. At the end of 2009. Furthermore. on Tuesdays and Fridays.

00 7.00 7.50-5. movement in Bhutan’s deposit rates across deposit categories as well as between financial institutions as tracked in more recent years (Tables 1.5 4.50 2008 4.00 4. Bhutan and India have shared extremely close economic and financial ties over the years. RMA. increasing from the range of 4.00-7.00-7.50 6.50 7.5-5.50 Source: Financial Regulation and Supervision Department.50 2007 4. 2 and 3) have been sluggish.ANNEX III INTEREST RATES Given its geographic location.50 7.50 2006 4.00-6. the historical relations between the two countries. Huge deviations in interest rates differentials for Bhutan would otherwise have serious effects on capital flows.50 4.50 6.) Since the liberalization of interest rates in 1997. and the Ngultrum has been pegged at par to the Indian Rupee since its first issue in 1974.00-7.) Average lending rates (% p.00-6.00-8.0 6.50-5. 50 45 40 35 30 25 20 15 10 5 0 2002 2003 Interest Rate Movements in Bhutan.50 7.00 2010 4.50 4.a.5-5. as well as the fact that India has long been Bhutan’s key development partner.00 7.00 6.50 6. These linkages have had consequent monetary implications in terms of the extent of interest rate and price movements in Bhutan being highly influenced by corresponding developments in India.5-5.50 7. India is not only an important stakeholder in Bhutan’s overall economic development but also a principal trading partner (under a joint Free Trade Agreement).00-6.50-5.5-5.a.00 2009 4. Table 1.0 60-6.00 6. 2002-2010 2004 2005 2006 2007 2008 2009 2010 Total loans (% of GDP) Average deposit rates (% p.0 percent in June .00 4. The saving rates of commercial banks indicated a marginal improvement.50-6. Commercial Bank Deposit Rates in Bhutan: 2006–2010 Percent per annum Types of deposit Savings Fixed Deposits a) 3 months to less than 1 year b) 1 year to less than 2 years c) 2 years to less than 3 years d) More than 3 years 4.

. decreased from the range of 6.3 billion as of the previous year. 12. respectively. and housing sectors ranged at 12-13 percent.3 percent). in the case of maturity deposits of commercial banks (1 year to more than 3 years).5 percent in June 2010. and the remaining were invested in other sectors.00 percent. During FY 2009/10. Meanwhile.8 percent) to Nu.ANNEX III 2009 to 4. However.50 percent.8 billion from Nu.9 percent in June 2010.30 percent.50-7.29. service and tourism (14.00-8. the major lending rates for the manufacturing industry. This increase was attributed mainly to the significant increase in housing and construction sector lending. increased (by 22.00 percent in September 2009 to a range of 6. of the total loans and advances of FIs. the interest rates on deposits with a maturity of above three years also dropped from 7.00-7.1 percent).5-5.50-8. respectively. followed by manufacturing (17.75 percent and 10.8 percent to 6.8 percent.6 percent were invested in building and construction. However. private sector banks and foreign banks continued to remain at the range of 11. growth in total financial institutions’ credit.6 percent during the period. Similarly. In response to the hike in the Reserve Bank of India’s policy rate. the interest rates of public sector banks on its deposits with a maturity of one year to three years.00-13. Although it appears that the lending rates of the commercial banks continued to be rather sticky during the review period.75 percent during the same period. general trade. On the other hand. 26. A similar decline in deposit rates was also witnessed for private sector banks. the average deposit rates declined slightly from 6. 13.50-16. As of June 2010. the average lending rate (including lending rates across major sectors) of commercial banks and other financial institutions remained at 12. In June 2010.6 percent).50-16. overall credit expansion in the economy has been strong.25 percent in June 2010. the average interest rates paid by commercial banks on corporate deposits (46 days to 1 year) remained at the range of 2. personal loans (15. and 1013 percent. 25. India’s benchmark prime lending rates (BPLRs) of public sector banks. excluding the NPPF. during June 2010.00-2.50 percent to 6.

0 12.0 10. BOBL.0 10.0 10.0 10.0 10.0 13.0 5 1 5 5 10 20 5 3-5 5-7 Source: BDFCL.0 13.0 12.0 12.0 12.0 14.0 15.75 13.0 10.0-15. DPNBL.0 13.0 12.0 13.0-13.0 1 1 10 1 10 13.0 15. Govt.0-13.0 12.0 13.0-13.0-13.0-13.0 14.75 13.0-16.0 13.0-13.0 14. BIL and RICBL.0 13.0 14.0 10.0-16.0 14.0-16.0 12.0 12.0 14. BNBL.0-13. General Trade 2.0 12. Housing 8.0 14.0 12.0 10.0-16.0-13.0 12.0 13.0 14.0 10. Agriculture & Livestock 7. Transport a) Truck & buses (Heavy vehicle) i) Term loan ii) Working capital b) Other passenger vehicles (commercial light vehicles) c) Non commercial light vehicles 6. .0 12.0 10.0-13.0 13.0 1 13.0 13. The calendar year refers to June-end periods.0 10.ANNEX III Table 2. and other service activities) 5.0-13.0 13.0 15.0 12.0 13.0-13.0 14.0-15.0 13.0-13.0 15.0 13.0 12. 2006-2010 Percent per annum Loan by Purpose 2006 2007 2008 2009 2010 Repayment period (yrs.75 13.75 13.0 12.0-13.0 13. Export Finance (Convertible Currency Areas) a) From date of 1st disbursement to 60 days after the date of the last disbursement b) More than 60 days after the last disbursement 3.0 13. Personal Loan 10.0-13.0 14. Employee Loan 13.0-13.00 12.00 12.0 10. Note: Effective April 1999.0-13.0 15. Equity Finance 9.) 1-3 1.0-13.0 14.0-13.0 10.0-16.0 10. TBL.0 13. Selected Lending Rates in Bhutan.0-16.0-16. contract services.75 13.0 14.0 10. the interest rates on deposits and advances were fully liberalised by RMA.0-16. Service Industries a) Term loan b)Working capital (includes tourism.0 14.0 14.0 14.0 13.0 12.0 13. Manufacturing Industry a) Term loan b) Working capital 4.

25 6.50 6.50 12.00-6.00-13.25-7.75 10. Domestic Deposit Rates Public Sector Banks Up to 1 year 1-3 years Over 3 years Private Sector Banks Up to 1 year 1-3 years Over 3 years Foreign Banks Up to 1 year 1-3 years Over 3 years II.25 6.00 6.50-16.50 2.25-7.75 5.75 2.75 Sept '09 Dec '09 Mar '10 Jun '10 Source: RBI Bulletin.00-7. Indian Deposit and Lending Interest Rates Percent per annum Item I. Benchmark Prime Lending Rates Public Sector Banks Private Sector Banks Foreign Banks 11.00 3.00 1.25 6.00-7.00 11.00 2.50 2.25-8.ANNEX III Table 3.50-16.50-16.50-16.25 6.50-7.50-16.25-8.00 7.00-13.00-8.00-9.00-6. .50-8.75 1.50-16.00-7.50-16.00 11.00-8.75 10.00 2.00 2.00 2.00 2.75 10.00-6.00-8.25-7.50 5.00-6.50 5.25-7.50 6.00 11.25 6.50-8.50 1.50 12.75-8.50-7.75 5.50 6.25-7.00 2.80-8.50 12.00-7.00-13.00-8.25-7.50 1.75 1.50-16.75 10.25-7.50 12.00 3.75 1.25-9. November 2010.25-8.50 1.00-13.50 6.00-6.25-7.00 2.75 6.00 1.25-8.00-7.00-6.75-8.

3 many. realizing the importance of a multi-sectoral approach towards tourism development.5 tourist target and more importantly. Expansion of the tourism sector is now recognized as an important prerequisite for meeting the government’s objective of promoting Bhutan as a quality service destination. and as a private sector employer to part of Bhutan's growing working population. the Bhutan Tourism Corporation was responsible for all tourist operations up till 1991.0 focused on diversifying tourism cultural to nature-based So Bhutan receives 180. Accordingly. Thereafter. low impact” So Bhutan receives 148. arrivals have increased to 23. The number of tourists visiting the country has been increasing steadily over the years.6 tourism on the socio-cultural and natural environment are minimal. Less 2% withheld tax to RGOB 1. The tourism sector continues to be recognized for its considerable potential as a major source of income for the government. development of the tourism industry has been guided by a policy of "high value. .0 from Less 35% agreed royalty to RGOB 65.5 in order to meet any future increased Less 35% agreed royalty to RGOB 93. UN World Tourism Organization.480 in 2009. traditional culture and values. which in 2000 was re-instituted as the Department of Tourism in a government restructuring exercise. in line with the country’s overarching development philosophy of gross national happiness. Kuenselonline news archives. the Department of Tourism under the Ministry of Economic Affairs was reconstituted as the Tourism Council of Bhutan (TCB).5 theme of “high value.000 Analysis of Daily Fee Breakdown (USD) tourist arrivals by the end of the 10th HIGH SEASON five-year plan. 1 Sources: Tourism Council of Bhutan. Since its inception. low volume. The government has set a target of achieving 100." in an effort to ensure the preservation of Bhutan's environment.000 people in 2009. a separate autonomous body under the chairmanship of the Prime Minister.9 to ensure that adverse impacts from Received by tour operator 91. Source: Tourism Council of Bhutan. Steps towards Client pays per day 200. It was then that the Tourism Authority of Bhutan (TAB) was established as a regulatory body. In 2008.0 policy has been realigned along the Less 10% commission to overseas agent 16. Bhutan’s tourism LOW SEASON Client pays per day 165. after the royal coronation of the fourth king in 1974. when the tourism industry was privatised.0 achieving this objective have Less 10 % commission to overseas agent 20. New York. The TCB estimates that the tourism industry provided employment (direct and indirect) for some 13.ANNEX IV TOURISM1 The first official tourists to Bhutan were a group of Americans led by Lars Eric Lindblad of Lindblad Travel. previously closed Received by tour operator 112.0 products involving the opening of up Less 2% withheld tax to RGOB 2.7 communities and protected areas. From 287 tourists in 1974.

8 million.7 46. The average length of stay for the top Asian source markets such as Japan.1 Contribution to Government revenue1 % Change in contribution 47.404 Trekking * 47.3 days. Table 1.8 days in 2008.9) % Change in receipts 6.5) % Change in arrivals Gross receipts1 18.4 30. Tourism revenue to the government consists of royalties and taxes collected from tour operators2. Each convertible currency paying tourist pays USD 10 per visit towards the Tourism Development Fund (TDF).636 23. While Japan and the United Kingdom were the second and third largest sources of international tourists in terms of absolute figures in 2009 respectively.094 27.5 7.587 4.3 21.855 18.6 13.6 days compared to 7. China and Thailand were all below 6 days. tourists from the United States continued to dominate the market both in terms of numbers (20.326 while revenue subsequently fell by 12. government revenue from tourism (in the form of royalties) accounted for 3.3 29.4 percent share in annual bed nights. Tourism performance in the fiscal year 2009/10 however.3 million).9 (19.1 (17. The TDF is used for the development of tourism activities with the approval of the TDF Management Committee. 1) in millions of USD. Among the source markets.626 17.0 29.8 31.507 23. in terms of bed nights.8 38. tourists from Switzerland had the highest average length of stay at 10.480 Of which: Cultural 13.013 14.076 613 2.6 31.8) * Includes both trekking only and trek-cultural combination.ANNEX IV Recent Performance Tourism continues to remain the kingdom's largest source for convertible currency earnings. The decrease in fiscal year 2009/10 was also particularly pronounced as the preceding year saw record arrivals because of the country’s coronation and centenary celebrations and the positive international interested generated from the United States Smithsonian Folk Life Festival. the United Kingdom outranked Japan (9.517.437 21.3 27.9 48. The average length of stay in 2009 was 7.3 percent to 24. arrivals dropped by 9. tourists from the United Kingdom tended to stay longer in the country.344 21.7 days. For the fiscal year 2009/10.5 11.3 24.3 10. respectively). down from its contribution of Nu. suffered from the impact of the global financial crisis and the AH1N1 pandemic in 2009.199 2.4 percent of total arrivals in 2009) and bed nights3 (22. and is maintained by the Tourism Council of Bhutan and ABTO.8 11. followed by Netherlands at 10. Compared to the previous fiscal year.3 percent of total bed nights in 2009).489 2. In terms of source markets. Government revenue includes royalty and 2% tax. 2 .0 (1. As a result.5 29.3 percent of total domestic revenue (Nu.611 million in 2008/09.1 percent to USD 32.5 24.7 percent and 9. Selected Tourism Indicators: 2005-2009 Item 2005 2006 2007 2008 2009 Tourist Arrivals 13. Sources: Tourism Council of Bhutan. 3 Bed nights measure the duration of stay in the country and have important implications for revenue generation.

arrivals from these two markets declined in 2009. Licenses for tour operators had been limited to 33 for a number of years prior to the liberalization. However. respectively. international tourism continued to recover with arrivals between January and August 2010 even surpassing the pre-crisis levels. On the whole. while arrivals from the Middle East (+62 percent) and the Asia and Asia-Pacific region (+4 percent) increased in 2009. Following liberalization. Developments. while tourists from Asia. South American (-11 percent) and African (-14 percent) regions decreased. Arrivals by Source (actuals): 2005-2009 14000 12000 10000 8000 6000 4000 2000 0 North America 2005 Europe Japan Australia Remaining and New Asia & Asia Zealand Pacific 2008 2009 Others 2006 2007 Even on the global front. China and Singapore have increased. growth prospects for 2011 remain positive at the long-term average of 4 percent. The UNWTO projected that this recovery would carry on well into 2010 with growth prospects estimated at between 3-4 percent. arrivals from the European (-17 percent). the number of tour operators has been increasing steadily since the tourism industry is viewed as being very . the European and North American (USA. to 880 million arrivals. these two regions accounted for 41 and 23 percent of the total arrivals. This last quarter growth was led by the Asia and Pacific and the Middle Eastern markets. Japan. North American (-31 percent).ANNEX IV From a regional perspective. However. the United Nations World Tourism Organization (UNWTO) estimates an annual global decline in international tourist arrivals in 2009 by 4 percent. All regions recorded improved performance while emerging economies continued to lead the recovery. Based on current trends. Challenges and Initiatives Liberalization of the licensing process in Bhutan’s tourism sector was initiated in early 1999. in particular. following a unanimous response from Bhutanese entrepreneurs to dilute the monopoly of early operators. a growth of 2 percent in the last quarter of 2009 helped counter the declines in all the previous three quarters resulting in a better-than expected overall performance. Canada and Mexico) regions have traditionally dominated the market and even in 2009. Indeed. Malaysia. as per the October 2010 UNWTO World Tourism Barometer. Thailand.

up from 475 in 2008.385 hotel rooms supplying 125.ANNEX IV lucrative and also in part because of the ease with which a license can be obtained. the BRCL operates small luxury resorts in Paro. 2001 with the main objective of setting up exotic resort hotels initially in Paro. The UNWTO is the leading international organization in the field of tourism. Punakha. Moreover. The BEVL’s Paro Uma Hotel commenced operations with 20 rooms and 9 villas in November 2004. Aman caters to a select affluent segment of world travellers and was founded in 1988. from 32 in 1996. and the Thimphu resort operational since January 2006. HPL Properties Pte Limited: 60 percent. two more FDI ventures were approved (US/UK and Thai investors). USD 3 million was met in proportion to the respective holdings of BEVL’s shareholders (M/s. provided however that they are evenly spread out in all the twenty dzongkhags (districts) where the hotels are located. The BRCL or Aman-Bhutan. In order to liberalize and integrate the Bhutanese economy with the rest of the world. registered in August 2001. 45 percent from IFC. In terms of annual tourist capacity. HPL Properties (West Asia) Pte. There were 622 licensed tour operators in 2009. The total project cost was estimated at USD 22 million of which 53 percent was to be financed by its foreign partner. Out of the total project expenditure of USD 4 million. Singapore. guidelines on External Commercial Borrowings and Economic Development Policy have been implemented. the industry seems to be dominated by a few well established tour companies – it has usually been the same ten companies that have accounted for almost half of the business in any given year (calculated as a company’s share of the annual bed-nights). In 2009. Singapore. Allowing joint venture projects such as the Bhutan Resorts Corporation Ltd (BRCL) and the Bhutan EcoVentures Ltd (BEVL) in the hospitality sector marked the early stages of building an enabling environment within the country to boost the local economy through inflows of technology. the existing hotels can cater to 1. foreign exchange. with construction already underway.5 million tourists a year. (BTCL) and Maha/Aman Resorts. Bhutan Eco-Ventures Limited (BEVL) was incorporated on November 6. another FDI venture in tourism was forged between Bhutan International and M/s. only about 55 percent of the total licensed tour operators have been active in the last five years. headquartered in . Bhutan joined the United Nations World Tourism Organization in October 2003. and the remaining from BTCL. its Punakha and Gangtey Gompa sites have been operational since August and October 2005. Thimphu. with a total of 72 rooms. on average. several policy initiatives such as the FDI policy. However. and 10 percent floated to the public). the number of hotels accredited to cater to international tourists increased to 109 in 2009. and creation of employment. While the development of its Paro site was completed and inaugurated end of June 2004. respectively. there were 2.418 beds per month. Soon after the establishment of the BRCL. Bhutan International: 30 percent. In terms of accommodation. is a joint venture between the Bhutan Tourism Corporation Ltd. and subsequently in Haa and Punakha. Limited. 14 such accredited hotels were newly completed while in total in 2009. In Bhutan. In 2009 itself. with the balance of USD 1 million raised through loans. Gangtey Gompa and Bumthang.

As such these markets remain largely untapped while the TCB is looking to promote high-end tourists from India and tourists from the region in general since these tourists typically visit Bhutan during the snow-season in winter and can thereby help smooth out some of the seasonality in the industry.0 8. Seasonality remains one of the key challenges for the tourism sector in Bhutan. the nature of such cultural products do not lend tourism in Bhutan to repeat visitations – close to 90 percent of tourists over the last five years were visiting Bhutan for the first time. Punakha and Bumthang. and the Maldives do not require visas to enter the country and as such. entry into the country by air has been limited to Paro in the west. tourism activities and benefits have been concentrated mainly in the west-central parts of the country. Bhutan aims to develop its vast potential.0 6.0 12. and strengthen its ability to withstand external shocks. Until recently.0 14. Bhutan is seen by international tourists and marketed by tour operators as primarily a cultural destination. coinciding with religious festivals in the major towns of Thimphu. Paro. By becoming a member.ANNEX IV Madrid with 154 member nations currently. The geographical spread of the country compounded by accessibility and infrastructure bottlenecks have limited the spread and impact of tourism within the country. 20. As a result.0 4.0 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Arrivals ('000s) Revenue (USD Millions) Another important challenge has been the regional distribution of tourism within Bhutan. Consequently.0 18. tourism in Bhutan is defined by two peak seasons within a calendar year (the second and last quarters). Tourism products have been largely limited to Bhutan’s religious festivals and cultural sites – in any given year. ‘cultural’ tourists make up over 80 percent of the total with the remaining tourists classified under ‘trekking’ made up of tourists who undertake only trekking activities as well as those who combine a trek with a cultural tour. .847 Indian tourists visited Bhutan in 2009. 4 According to the TCB. Tourists from neighbouring countries Bangladesh. Furthermore.0 16. Quarterly Trends: 2008-Q2 2010 20. India.0 2. the TCB data on international tourists do not include tourists from these countries4.0 10. through a single airline with concomitant capacity problems while entry via road has again been limited to the border town of Phuentsholing in south-western Bhutan.

4 78 74.862 2.1 Sep 2.2) 1.ANNEX IV However.263 5.4 Mar 3.8 (21) (18.173 4.5) 11.4 May 1.9 (38) (38.8) 1.2) (23.3 Jun 869 1. The nomadic community of Merak Sakteng in north-eastern Bhutan was opened to tourism in September 2010 as part of this strategy and to increase the regional spread of tourism.8 31 30. Rev* Nos. focusing on community-based and eco-tourism products.059 4.2 Nov 4. Buddha Air started operations in Bhutan.5 9 4.5 61 49.747 2. several initiatives have either already been taken or are underway to address these challenges and to ensure that Bhutan is able to develop its tourism sector in a manner that is sustainable and equitable. Improving tourism infrastructure.4 50.9 (12) (19.278 14.2) 1.386 1.3 74.5) 23. Accessibility in general will also be improved as Druk Air expands its operations network.3) Oct 6.7) 2.1 3.4) (19.311 1. The focus of these initiatives has been two-fold: to improve the regional spread of tourism and to diversify tourism in order to ensure its sustainability and to smooth out the current seasonality in the industry.6 21 14.220 1.4) 1. the opening up of previously protected areas.7 (1.3 (12) (3.2 753 0.9 1.017 1.184 3.7 24 15.2) (34.636 38.085 1. Rev* 667 0.428 4. Notably.5 (17. the first such institute in the country. Plans to establish domestic air services in eastern and central Bhutan are also expected to enhance accessibility to these regions. Gelephu in south-central Bhutan and Samdrup Jongkhar in south-eastern Bhutan were opened as access points for tourists in 2008 in order to boost tourism in the southern and eastern regions.020 4.607 3.6) 2. to help build capacity in the hospitality sector at an international standard.4 22 41.5) 764 0. Rev* Nos.1 (6) (9.1 0.9 (15) (17.190 1.1 (18) (6.4 67.1 38 37.8 37 35. Rev* 552 0.0 51 49. In terms of product diversification.2 Apr 3.4 73. was established in Thimphu in 2010.7 25 25. capacity and governance and liberalizing the pricing policy are also key focus areas.126 6.512 5.1 * Revenue figures in USD millions Source : Tourism Council of Bhutan. reserves and remote communities are aimed to promote Bhutan not just as a cultural but also as a trekking and environmental destination.8 Dec 1.358 1. Table 2.4) 3.3) 4.2 0.5 Total 27.0 (38) (40. 2009 Absolute % change Nos. a private airline from Nepal.9 4.4 . the existing Druk Air and a new Tashi Air have been approved by the government to provide domestic air service expected to commence by April 2011. Tourist Arrivals and Revenues 2008 Absolute % change Period Nos.2 Aug 1.743 2.480 31. Rev* Jan 532 0. the Royal Institute for Tourism and Hospitality.8 34 30. Among numerous initiatives to achieve more regional balance.4 Jul 1. The TCB has also embarked on proactive marketing campaigns involving collaboration strategies with international tour operators as well as active participation in numerous tourism fairs and road shows.809 5.7 Feb 1.8 811 0.4 (28. Two airlines.2 (15) (16.5 (37) (41. while in August 2010.7 (30) (31.4 19 9.9) 2010 Absolute % change Nos.0) 858 0.0 85 99.162 9.1 50 55.9 3.326 6. Rev* Nos.

193 Germany 1.2 0.9 2.4 13.1 % of total 20.404 21.0 2007 41.8 20.8 1.2 3.6 10.952 2.6 20.4 0.7 7.8 0.8 2006 41.4 2.456 France 532 708 738 China* 234 362 504 Thailand 96 776 707 Australia 458 774 1.5 28.815 2.4 11.681 5.267 1.4 -32.6 0.0 2.076 USA 4.181 Netherlands 329 389 497 Italy 529 648 614 Singapore 149 180 350 Canada 292 375 588 Switzerland 363 427 396 Spain 185 281 444 Austria 319 484 443 Malaysia* 72 49 94 Belgium 134 220 291 Poland* 52 133 252 Brazil* 44 55 79 Finland 21 35 76 Israel 98 46 152 Denmark* 56 85 170 Mexico 83 73 127 New Zealand 76 116 127 Others 765 1.199 23.402 1.1 3.042 1.342 21.7 0.941 2.143 975 970 780 759 708 556 543 485 420 367 364 184 178 161 159 153 125 122 1.3 6.5 0.662 23.7 103.4 8.4 0.069 627 1. Canada & Mexico.9 4.1 4.136 1.8 1.5 100.7 -10.3 100.9 0.7 0.0 -42. 2005 40.0 14.4 1.5 2.008 United Kingdom 1.4 -14.3 20.7 0.4 0.1 1.554 1.0 -28.4 6.6 -11.3 8.507 * Clubbed under others in the past.4 4.8 27.7 3.074 1.6 10.5 0. Source: Tourism Council of Bhutan.189 1.1 10.5 4.9 0.3 100.1 4.0 66.ANNEX IV Table 3.5 -15.4 3.773 Japan 1.4 37.0 6.0 100.1 6.9 1.2 84.6 -15.745 2.7 9.4 6.2 2.480 2.1 34.0 -39.489 2.4 1.587 Cultural 13.626 17.5 2.8 0.4 6.758 1.2 -14.3 5.094 Trekking** 613 2.7 -9.9 55.7 0.6 -15.9 0.9 3.786 3.4 5.9 4.1 23.587 1.1 -34.2 13.9 25.636 4.947 27.2 4.018 5.8 0.2 -28.3 100.5 -36.834 TOTAL ARRIVALS 13.0 .437 2009 4. Tourist Arrivals by Nationality and Activity: 2004-2009 Country of Origin 2005 2006 2007 2008 6.5 28.7 0.6 -7.462 1.0 2008 42.2 4.3 0.7 -21.4 100.8 0.7 25.1 -15.2 6.3 10.2 27.6 11.5 31.0 Change over 2008 (%) -31.524 915 751 667 852 597 803 472 221 432 233 249 191 78 127 138 180 1.6 30.968 1.5 -9.0 2009 41.0 15.8 33.717 1.2 9.1 0.855 18.8 5.3 3. Source of International Tourist Arrivals by Region (% of total) Region Europe of which: United Kingdom Germany Asia & Asia Pacific of which: Japan China Thailand Australia North America of which: USA South America Middle East Africa Total North Amercia includes USA.2 25.013 14. ** Includes trek only as well as trek & cultural combination.3 0.7 7.

Kurichhu. reliable and affordable electricity. Ministry of Economic Affairs Department of Revenue and Customs. while it took over Tala in April 2009.80 per unit from Kurichhu and Tala. 2005). the rates were fixed at Nu. • Bhutan Power Corporation Limited (BPC) . • Druk Green Power Corporation Limited (DGPC) . responsible for the promotion.020 MW. The Basochhu project was financed with assistance from the government of Austria and hydropower from Basochhu is sold to the domestic market. namely Basochhu with a capacity of 64 MW.2 per unit from Chhukha (revised upward from Nu. 2008. All three projects export a bulk of their production to India. (Please see table 3 for details on financing) Bhutan’s hydropower sector currently comprises of: • Department of Energy (under the Ministry of Economic Affairs) . through the amalgamation of the erstwhile Chhukha.30 per unit for up to 15 percent of the annual generation (royalty energy) and ∗ Sources : Bhutan Electricity Authority Bhutan Power Corporation Limited Department of Energy.760 MW has been estimated as being techno-economically feasible. and Basochhu hydropower corporations. development and management of Bhutan’s hydropower resources. 2008 and is now pegged to the Tala export tariff.1. While the first hydroelectric plant was built in Thimphu.A public utility company mandated with the domestic provision of adequate. producing 360 kilowatts (kW) of electricity.1. Background Bhutan’s hydropower potential is estimated at 30.The government’s policy and planning body for the entire energy sector. Besides Chhukha. hydropower earnings have driven economic growth since the first major hydropower plant was commissioned in Chhukha (336 MW) in 1988. The export tariff for Kurichhu was increased from Nu.0. The DGPC was incorporated on January 1.480 MW or about 5 percent of that potential has been harnessed.1. The Chhukha. Ministry of Finance Druk Green Power Corporation Limited Kuenselonline news archives . Hydropower is exported to India at Nu. • Bhutan Electricity Authority (fully autonomous since January 2010) . of which around 23. Kurichhu and Tala projects were all financed with assistance from the government of India in the form of 60 percent grant and 40 percent loan components.000 megawatts (MW). For domestic sale to the BPC.A wholly-owned corporate entity of the government placed under Druk Holding and Investments.A regulatory body to regulate the electricity supply industry. Presently. there are currently three other major hydropower plants in operation. and at Nu. Kurichhu with a capacity of 60 MW and Tala with a capacity of 1. a little over 1.75 per unit from January 1.ANNEX V THE POWER SECTOR IN BHUTAN∗ 1.5 per unit from January 1.

The BPC’s power tariff for its consumers has been structured as follows: 1st August 2010 to 30th 1st July 2011 to 1st July 2012 to 30th June 2012 30th June 2013 Tariff in Nu/kWh 0.51 1.85 0.2.79 Category Wheeling (Nu.04 2. Rates for royalty energy were revised downwards to Nu. around four years (1974-1978) were spent on the construction and development of infrastructure.85 101-300kWh 1.47 Low Voltage 300+ kWh 1.85 1.bpc.14 2. Chhukha Quarterly Performance: 2008 – June 2010 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Generation on 100% Capacity Utilization (MU) Actual Generation (MU) Domestic Sale (Nu Million) Export Revenue (Nu Million) . at Nu. The project was completed at a cost of Nu.bt/utilities/electricity-tariffs).54 Energy charge High Voltage Demand charge 85 105 105 (per month) Source: Bhutan Power Corporation Ltd (http://www.0.11 0.460 million and fully commissioned by August 22.71 1.11 0.ANNEX V beyond the 15 percent royalty energy. Chart 1.14 1. Chhukha Hydropower Plant (336 MW) Chhukha was Bhutan’s first major hydropower project and is located on the Wangchhu./kWh) 0.94 Energy charge 1. Being the first time that such a project was undertaken.63 Medium Demand charge Voltage 95 105 115 (per month) 1.1.20 per unit.11 0-100 kWh 0.62 2.13 per unit from August 2010. 1988.94 LV bulk 1.54 1.54 1.04 2.

Mongar. to provide electricity to rural homes in the east and to bring about balanced regional development. Basochhu Quarterly Performance: 2008 – June 2010 180 160 140 120 100 80 60 40 20 0 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Generation on 100% Capacity Utilization (MU) Actual Generation (MU) Domestic Sale (Nu Million) Kurichhu Hydropower Plant (60 MW) A run-of-the-river scheme on the Kurichhu in Gyelposhing. The BPC is in the process of laying Nu. Basochhu power is supplied through 220 kV and 66 kV transmission lines to the Semtokha central switchyard in Thimphu. . Starting from Gyelposhing where the Kurichhu project is based. Tingtibi in Zhemgang. Deothang in Samdrup Jongkhar. Chart 2. The Kurichhu project was completed in seven years (1995-2002). the power is confined to the western grid only. Construction commenced in November 1997 while both stages were fully commissioned by September 2004.1. The lower stage utilizes water released by the upper stage to generate 32 MW of hydropower. which distributes it to dzongkhags in eastern and central Bhutan. Kanglung in Trashigang. Kilikhar in Mongar. Although at present.1.2 billion worth of transmission towers and cable lines to link the eastern and western power grids by July 2011. the 132 kV line connects substations in Tangmachu in Lhuentse.837. Nangkhor in Pemagatsel. The ultimate objective of the RGOB is to link the western grid to the eastern grid in Gelephu. The Kurichhu plant supplies power to the eastern transmission grid network. and a feeder bay extension in Gelephu. An additional 20 percent flow (i. The two stages of the Basochhu project have a combined installed capacity of 64 MW.ANNEX V Basochhu Hydropower Plant (64 MW) The Basochhu project was constructed with financial assistance from the government of Austria. the project was constructed on the command of His Majesty the 4th King Jigme Singye Wangchuck. forming an integrated national power transmission grid. work is underway to transmit the power to the southern dzongkhags by the BPC. 8 MW) is tapped from the nearby Rurichhu.2 million grant from the GoI. The network was built with a Nu.e.

ANNEX V Chart 3. Tala Quarterly Performance: 2008 – June 2010 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Generation on 100% Capacity Utilization (MU) Actual Generation (MU) Domestic Sale (Nu Million) Export Revenue (Nu Million) . While the project was initially scheduled to be completed in 8 years. Kurichhu Quarterly Performance: 2008 – June 2010 180 160 140 120 100 80 60 40 20 0 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Generation on 100% Capacity Utilization (MU) Actual Generation (MU) Domestic Sale (Nu Million) Export Revenue (Nu Million) Tala Hydropower Plant (1. is located downstream on the Wangchhu from the Chukha hydropower plant. Construction on the project commenced in October 1997. Chart 4. several unforeseen obstacles from adverse geological conditions delayed the commissioning of the first unit of the project to July 2006. the largest hydropower plant in operation so far.020 MW) The Tala project.

Venkataraman. Mr. received the Druk Thuksey medal. September 15. 1988 October 21. 2005. February 18.020 MW Tala project was signed between the GoI and the RGOB. April 14. 2004: The lower stage Basochhu project (40 MW) started commercial operations. The project was formally inaugurated on March 26. Effective July 1. Jigme Singye Wangchuck. June 2. and the Bhutan Electricity Authority. 1974: The government of India and the RGOB signed the agreement for the construction of Bhutan’s first major hydropower project at Chhukha. The network distributes power from the Kurichhu project to dzongkhags in eastern and central Bhutan. 1986: Bhutan began exporting hydropower to India with the commissioning of Chhukha’s first 84 MW hydro-turbine unit. Chronological Milestones in the Power Sector • • March 23. September 7. the then President of India. the Department of Power under the Ministry of Trade and Industry (now renamed the Ministry of Economic Affairs) was separated into the Bhutan Power Corporation. October 2001: The upper stage of the Basochhu project (24 MW) was commissioned. 2003: The eastern transmission grid network was inaugurated. 1994: The contract for the 60 MW Kurichhu project was signed between the GoI and the RGOB. 1995. 1995: The financing agreement for the 64 MW Basochhu project was signed between the RGOB and the government of Austria. June 10. September 8. Works on the project began in October 1997. 1988: The 336 MW Chhukha hydropower project was inaugurated by His Excellency R. Construction on Phase I started in November 1997. and the development of hydropower in Bhutan. in the presence of His Majesty the 4th King. 1999: Mr. • • • • • • • • • • . Chief Engineer and Managing Director of the CHPCL upon its establishment in 1991. the Department of Energy. March 5. Rao was also recipient of the Padmashri National Award from the government of India in 1992 for his outstanding and valuable contribution to Indo-Bhutan relations. Construction commenced on September 27. Ganardhana Puranik Narayana Rao. 1996: The contract for the 1.ANNEX V 2. 2002. 2003: The RGOB and the GoI signed a memorandum of understanding for the preparation of a detailed project report (DPR) on the Punatsangchhu hydroelectric project. The restructuring was implemented in pursuance of provisions in the Electricity Act 2001. The other three units were commissioned by August 22.

2009: MOUs were signed with 4 Indian public sector undertakings to prepare detailed project reports on the Amochhu. effective from January 1. 2007. Chhukha and Kurichhu) along with other government-owned companies were brought under the newly created Druk Holding and Investments (DHI). The agreement. 2006: Tala commissioned its first turbine (170MW). July 28. The first phase (3 units of 45 MW) was completed in September 2001 and commercial operations commenced in November 2001. 2007: Bhutan and India signed the agreement on the implementation of the Punatsangchhu I hydropower project. 2006: A formal agreement to provide a systematic framework for cooperation in the development of hydropower projects was signed between the RGOB and the GoI.8 per unit was agreed upon. 2006: The Kurichhu project was formally inaugurated.5 per unit to Nu. March 31. The DHI is a government holding company with the primary objective of safeguarding national wealth for all times to come. January 25. November 11. Construction commenced in November 2008. The protocol on the tariff for the export of power from Tala was also signed between PTC India Limited and RGOB – a tariff of Nu. to be increased by 10 percent every 5 years until the loan amount is repaid. after which the increase will be by 5 percent every 5 years. April 26. Tata was allotted equity holdings of 26 percent in the Dagachhu Hydro Power Corporation. valid for 60 years and to be reviewed every 10 years. July 29. Kuri Gongri. 2005: The MOU for the preparation of the DPRs for the Punatsangchhu (Stage II) and Mangdechhu hydroelectric projects were signed between the RGOB and the GoI.1.2 per unit. 2005: The agreement for the 114 MW Dagachhu hydropower project was signed between the governments of Austria and Bhutan. The second turbine was commissioned on October 7. and committed to purchase power from the project for 25 years. December 22. The governments of Bhutan and India also signed an • • • • • • • • . Chamkharchu-I and Kholongchhu projects. The second phase (1 unit of 15MW) was completed in May 2002. 2006 while all six units were operational from March 29. Tala was officially commissioned in 2008. January 2008: The Tata Power Company Limited became the first private company to invest in Bhutan’s hydropower sector under the new hydro-policy. July 28. Construction commenced in October 2009. 2007: The hydropower corporations (Basochhu. facilitates the supply of funds and manpower from India for the construction of hydropower projects in Bhutan.ANNEX V • • December 2004: Tariff for the export of power from Chhukha to India was revised from Nu. to be financed by the GoI with 40 percent of the total cost as grant assistance and 60 percent as loan at 10 percent per annum interest.1. 2005.

Except for the composition of grants and loans. In terms of financing. Under the joint venture mode. After completion. the IG model follows the model implemented so far in the construction of the Kurichhu and Tala plants wherein the two governments establish an authority that gets 100 percent financing from India to undertake the construction of projects. Apart from this strategy. the Indian public sector will partner with the DGPC to undertake projects. these projects will be handed over to DGPC. a debt-to-equity ratio of 70:30 has been agreed to in principle for the four projects identified under this mode.000 MW of hydropower production are targeted under this mode. 3. • April 30. Six projects have been identified under this mode. Preconstruction works had already commenced in March 2010. The Indian public sector partner will be allowed 51 percent equity stake. Hydropower Strategy and Projects in the Pipeline The RGOB aims to achieve a total installed capacity of 10. About 9. The Indian partners will leverage the loans needed for construction.ANNEX V agreement on consultancy services for preparation of Bhutan’s national transmission grid master plan. . the DGPC will also make its own additional investments in medium-sized projects aiming for an extra 500 MW of power by 2020. 2010: The implementation agreements for Punatsangchhu II and Mangdechhu projects were signed. DGPC’s share of the equity will be provided by India as grant.000 MW of hydropower by the year 2020. To that end the DGPC’s 10 year investment plan formally outlines two modes through which this objective will be achieved – through an inter-governmental (IG) undertaking with the government of India and through joint venture undertakings with Indian public sector companies.

Construction of the Sankosh project is scheduled for early 2011 and of the remaining two projects for 2012. Amochhu storage (620 MW). DPRs for the Sankosh and Ammochhu storage and Kuri Gongri projects are currently under preparation.9 million (December 2006 price levels) for generation and INR/Nu. DPRs for the Punatsangchhu II and Mangdechhu projects have been completed and the projects are scheduled for completion in 2016. Punatsangchu II (990 MW).ANNEX V Table 1.000 MW of hydropower by 2020.200 MW) The agreement on the implementation of the Punatsangchhu I hydropower project.2 million for transmission works up to the Bhutan-India border. Inter-governmental Undertakings Six projects have been identified and are at various stages of development or feasibility study under the IG mode: Punatsangchhu I (1.074. Punatsangchhu I will be financed on a 40 percent grant and 60 percent loan basis. The project was approved at an estimated cost of INR/Nu. Mangdechhu (720 MW). Punatsangchhu I (1. A Summary of Hydropower Projects in the Pipeline Project 1 Punatsangchhu-I 2 Punatsangchhu-II 3 Mangdechhu 4 Sankosh Storage 5 Kuri-Gongri 6 Amochhu Storage 8 Bunakha Storage 9 Kholongchu 10 Chamkharchhu-I 11 Dagachhu 12 Nikachhu 13 Gamri Capacity DPR (MW) Schedule 1200 Completed 990 720 4060 1800 620 180 650 670 114 208 100 Completed Completed 2010 (Dec) 2011 (Dec) 2011 (Sep) 2011 (Dec) 2011 (Mar) 2011 (Jun) 2011 (Dec) Completed Underway Underway Construction Schedule 2008-2015 2010-2016 2010-2016 2011-2020 2012-2019 2012-2018 2012-2020 2012-2018 2012-2018 2012-2018 2009-2013 2012-2015 Expected completion: 2016 Development Model IG IG IG IG IG IG JV with Indian PSU JV with Indian PSU JV with Indian PSU JV with Indian PSU JV 7 Wangchhu Storage 600 Source: DGPC.060 MW).200 MW). Sankosh storage (4. Meanwhile. 2007. Projects 1-10 will be developed to achieve the government's target generation of 10.31. Construction commenced in November 2008 and the project is expected to be completed by 2015. The two projects will be financed on a 30 percent grant and 70 percent loan basis.073.800 MW). and Kuri Gongri (1. Construction commenced in November 2008 and the project is scheduled to be completed . The loan and grant proportions for these projects have not yet been finalized. financed by the GoI as 40 percent grant assistance and 60 percent loan at 10 percent interest per annum was signed on July 28.4. Projects 11-13 are additional investments by DGPC towards its goal of an additional 500 MW of power by 2020.

the DGPC also promotes self-undertaken projects in medium-sized plants to build human resource capacity in the hydropower sector. Under this strategy the DGPC will partner with domestic and external investors to raise financing for and to manage the projects. India . The project is being financed on a 60:40 debt equity ratio with three equity stakeholders: DGPC (59 percent). As of May 2010. studies are also underway for the diversion of Tsibjalumchhu to the Tala reservoir to increase winter generation as well as for the Maokhola hydroelectric project in south central Bhutan. estimated to cost more than Nu.918 billion in June 2010. At present. DGPC Investments Apart from developing hydropower projects through financial assistance from India under the IG and JV modes. by storing water during the monsoons for use in the dry winter months. corresponding to Nu. Sankosh Storage (4. Satluj Jal Vidyut Nigam limited. 8. the tariff for Punatsangchhu may be higher than the Tala tariff as it entails a higher cost for the RGOB. the country’s hydropower plants are all run-of-the river schemes. As a reservoir project. with the remaining 90 percent to be exported to India. revised to Nu.ANNEX V by November 2015. The DPR for the project is expected to be ready by March 2011. It is also expected that the export tariff will be determined as per the intergovernmental agreement. The project was approved at an estimated cost of USD 201. with generation shrinking in winter when river water flow is minimal. including Dagachhu (114 MW). Wangchhu storage (600 MW) and Chamkharchhu I (670 MW).10. Tehri hydro development corporation limited and the national thermal power corporation have been identified as the joint venture partners of DGPC to undertake these projects. Dagachhu Hydroelectric Project (114 MW) DGPC is a lead partner in the construction of the 114 MW Dagachhu hydroelectric project.16 billion (2008 price levels and exchange rates). subject to review every 4 years. The project is expected to take eight years to be completed. It is estimated that 10 percent of the electricity generated from the project will be utilized for domestic consumption. 19 percent of the project was completed while all preconstruction works (building of basic infrastructure) are expected to be complete by end of 2010. Given the revised financing modality with a lower grant component. Several projects have already been identified.5 million.060 MW Sankosh project. The NHPC limited India. Construction on Dagachhu project has already commenced while feasibility studies for Nikachhu and Gamri projects are underway.210 billion will be the country’s biggest hydropower project so far. and suffer from seasonal fluctuations. Joint Venture Undertakings Four projects have been identified under this mode: Bunakha storage (180 MW). Sankosh is expected to stabilize and smooth out the seasonality in Bhutan’s hydropower generation.060 MW) The 4. Kholongchhu (650 MW). Nikachhu (208 MW) and Gamri (100 MW) projects. In addition. Tata Power Company Limited.

2009 and is scheduled for completion by March 2013. 2012 to December 31. 2018 (on a renewable basis).ANNEX V (26 percent) and the National Pension & Provident Fund of Bhutan (15 percent).600 million.000 certified emission reduction (CER) credits for trading. 2010. Dagachhu was approved as a clean development mechanism (CDM) project by the United Nations Framework Convention on Climate Change CDM executive board on February 26. estimated to generate 500 GWh of electricity annually. with the crediting period defined from January 1. power from the project will be evacuated to India through a long term power purchase agreement with Tata Power Trading Company Limited. and the NPPF is providing a loan of Nu. Construction on the project commenced on October 1. will provide 500.23 million for financing the electro-mechanical works. Besides the domestic sale of royalty energy. . The project. The ADB is providing a loan of Euro 41.

5 139.000 MW of installed capacity by the year 2020. is the potential shortage of power for domestic consumers in the dry winter months.144 MW. Kurichhu and Tala). constructed over a span of some 11 years. construction of new hydropower projects. the country’s hydropower plants are all run-of-the river schemes. the total winter generation (January-March) stands at about 288 MW while domestic winter demand has already reached 237 MW (of which 66 percent comes from the industry sector). 500 400 300 200 100 0 -100 -200 -300 Export (MU) Import (MU) Import Cost (Nu millions) Jan-Mar Jan-Mar Jan-Mar Jan-Mar Jan. and suffer from seasonal fluctuations. This pace will be much accelerated over the next decade as the government sets to achieve its objective of 10. At present.2 165. Construction of ten megaprojects with a combined capacity to generate 11. Currently. Winter power shortages are expected to continue until 2016 when Punatsangchhu I is commissioned. having a combined generational capacity of 1. resulting in a shortfall of 20 MW in 2011.8 331.1.490 MW of power – about 10 times the capacity developed over the last decade – have either already commenced or will take place in the remaining 11 years till 2020.3 billion (see graph below).ANNEX V Hydropower Prospects 2011-2016: Winter Shortages Development of Bhutan’s hydropower sector has thus far proceeded at a slow pace with three hydropower projects (Basochhu. Domestic demand is expected to rise further to 308 MW by 2011. with the DGPC even possibly becoming a net importer during winter until then.3 .5 241. with generation shrinking in winter when river water flow is minimal. Even as Bhutan sets off on this accelerated pace. On the demand side. the immediate concern over the long gestation period (during which all planned megaprojects are in the construction phase).1 407.Mar Jan-Mar Jan-Mar 2011 2012 2013 2014 2015 2016 2017 50. and the government’s rural electrification project are expected to compound the problem of power shortage. increasing demands from power-intensive industries. The DGPC projects a winter import requirement of 718 MU during the next six years at a total cost of Nu.

9. hydropower export revenue as a percentage of GDP has also been falling. The BPC is also considering two captive thermal power plants of 100MW run on gas or coal based either in Pasakha or Samdrupjongkhar. to Nu. Revenue earnings for the government from the hydropower sector (corporate income tax on the DGPC and transfer of dividends from Tala) in fiscal year 2009/10 amounted to Nu. accounting for 92 percent of exports and 72 percent of imports during fiscal year 2009/10. power-intensive industries may have to adopt load shedding as well as load reduction through higher winter tariffs. However. Finally. Among these strategies. Since India also faces power shortages.6 percent from the previous year. Thimphu and 13MW plant at Bindu. 3. with the two being netted off.3 percent in 2009/10. the ratio of hydropower export earnings to GDP was recorded at 16. Samtse are in the pipeline to be financed by the BPC. power would be imported at the same tariff as that at which it is exported.5 billion or about 22. reflecting a decrease of 2. Under this module. the Tichulumchu and Lubichu streams have been diverted to the Chhukha dam to increase winter generation (expected by 9-10MW).7 percent of the national revenue for that year. Hydropower exports to India are still the most important export. The hydropower sector constituted around 9 percent of GDP prior to the commissioning of Tala with this ratio surging in 2006/07 and peaking in 2007/08 at around 20. In 2009/10. The draft feasibility report for the Begana plant has already been prepared and has been estimated to cost Nu.1 billion. . As a result. Hydropower Exports India remains Bhutan’s largest trading partner. in tandem with slower growth in export earnings and even a fall in earnings in 2009/10. Feasibility studies to divert Tsibjalumchu into the Tala dam are also underway – with the potential addition of 10-30MW winter generation by 2013.5 percent each.8 percentage points from the previous fiscal year. Except for Chhukha which saw a nominal increase in its export revenue. construction of small plants are also being considered – for example. since then. the export earnings of both Kurichhu and Tala fell by 7. export revenue fell by 4.95 billion. The commissioning of the Tala hydropower project was instrumental in doubling power export earnings in 2006/07. accounting for 39 percent of total exports in 2009/10. If the shortage is acute. Another possibility being considered is that of ‘power banking’ where power can be exported tariff-free in summer to an energy bank for use in winter. 4. The volume of hydropower sold domestically increased by over 20 percent between 2008/09 and 2009/10.1. a 20MW plant at Begana. owing largely to increased domestic consumption. the concern for the government is that it may have to import power from India at a rate higher than its export tariff unless the two sides agree to adopt a netting-off module.ANNEX V Discussions are currently underway on the feasibility and tariff rates for the import of power from India.5 percent. Several other strategies are also underway or being considered to meet the shortage.

7 29.8 9.0 5000. Export Earnings from Hydropower: 2002/03-2009/10 Millions of Nu.0 6000.8 5.5 -6.9 -4.8 6.0 Tala Chhukha Domestic Sale Volume (MU) 6465.5 -1.0 3000.8 2.0 8.6 2004/05 2.8 -7.804.5 385.6 16.3 9.434.6 2.9 96.6 3.0 9.6 100.0 1000.091.9 2.4 3690.0 0.7 17. Hydropower Export Revenue (in Nu millions): 2007/08-2009/10 11000.978.8 6.042.3 18.8 100.690.3 62.6 2007/08 3.7 6.0 2000.969.2 2007/08 2008/09 Kurichhu 2009/10 Export Volume (MU) Table 2.3 330.4 -2.465.7 46.4 38.2 -7.0 4000.1 9.5 305.7 20.0 7.2 3.8 -7.9 6080.0 20.4 -9.9 2.3 10.4 -25.5 330.6 3.0 9.4 -0.953.5 305.2 0.1 16.985.9 6.2 2.6 4.080.1 497.1 39.7 6.363.8 100.9 8.123.5 9.0 9000.0 0.2 352.8 3668.0 7000.509.584.9 42.3 101.804.1 10.759.3 2005/06 2.5 19.638.6 2.7 35.2 3.2 60.7 6.0 10000.0 11.8 10.6 61.3 3.3 -9.8 3.3 25.4 2003/04 2.8 Hydropower Plant Chhukha Hydropower Plant Annual Growth in % Tala Hydropower Plant Annual Growth in % Kurichhu Hydropower Plant Annual Growth in % Export Revenue Annual Growth in % Chhukha and Kurichhu Annual Growth in % Share in % to total As % of GDP Tala (Share in % to total) As % of GDP Export Revenue as % of GDP 2002/03 1.7 35.1 473.9 6.9 8.5 60.4 6.903.979.2 127.2 5979.671.2 -4.3 .0 -1.7 6.232.1 12.1 4.6 352.5 3638.3 523. 2008/09 2009/10 3.3 18.9 2.6 100.9 493.363.668.974.306.8 38.0 8000.509.1 9.ANNEX V Chart 5.8 2006/07 3.5 -1.584.5 39.0 9.8 -7.

In a typical year. On the other hand. Apart from revenue earned from the export of the product itself. Trade Bhutan represents a model case study in the harnessing of hydropower to finance and support macroeconomic growth. production is near or at capacity in only about 5 months (June-October). The production of hydropower depends significantly on the force of the water turning the turbine as well as on how the water is transported away from the turbine. another potential source of earnings lie in the amassing and sale of carbon credits. For Bhutan. Scarcity of water and threat of over flow: Associated risks All hydropower plants in Bhutan are run-of-the river schemes and hydropower is a highly seasonal product. Low water levels and reduced force of water flow can reduce electricity production per unit of water and its associated revenues. In the production of hydropower in Bhutan however. Hydropower is developed from the force of free flowing rivers which drive turbines to generate electricity.000 megawatts of electricity. By increasing production through the construction of new hydropower plants. The adoption of technology that allows reduced carbon dioxide emissions in the development of the hydropower plants enables the country to emit carbon dioxide at levels below the standards set by the UNFCCC. In such cases. the gradual melting of snow and ice during the early summer months can trigger swelling of rivers downstream. While the relatively higher costs of developing such projects can pose an important financial constraint. The following are some factors which can cause fluctuations in electricity generation. Bhutan is in a position to make optimum utilization of its water resources to meet growing domestic demand and boost its exports of hydropower. especially construction and industry. arrangements such as the UNFCCC’s clean development mechanism provide channels for developed countries with emission reduction/limitation commitments to implement emissionreduction projects in developing countries and trade the certified emission reduction credits generated from such projects. Earnings through the development and trade in hydropower continue to drive growth in various sectors.ANNEX V The Economics of Hydropower Flows Water remains one of Bhutan’s most important national resources. hydropower plants may be forced to shut down with adverse effects on overall electricity production. which can cause water scarcity and affect the production of electricity. water downstream is susceptible to dry bouts due to snowfall frequency and formation of ice during the winter season. there is an associated threat of overflow that can occur due to heavy rainfalls accompanied by flash floods. being located in the Himalayas. hydropower generation is severely seasonal. freely available and with a potential of generating about 30. a key economic question is the use of water available within an annual weather cycle. The country then earns carbon credits which can subsequently be sold to the developed country signatories of the Kyoto Protocol. Without a reservoir to store water during winter for the production of electricity. . Similarly. while heavy monsoon rain helps to ensure better water supply for hydropower generation.

It serves as storage for water. Similarly. the controversies surrounding the displacement of local populations from their habitat and disturbances in the ecosystem are other important concerns in the development of reservoirs. One of the key advantages of constructing reservoirs is to maintain a minimum level of water throughout the year and to stabilize water levels during rainy and dry seasons. which can be used throughout the year to generate power with storage capacity dependent on the relative size of the reservoir. On the other hand. heavy rainfall can cause landslides and floods that could destabilise the foundation of the reservoir leading to possible outburst of the reservoir. . thereby ensuring greater stability in power generation.ANNEX V Reservoir A reservoir plays a vital role in addressing the above two limitations in the production of electricity. dangerous for those downstream of the river.

540 million) Euro 17.10) Rs.69% RGOB Govt. 1996 KURICHHU February 18./Nu.239 million .15 million (Nu.3./Nu.839 million (till October 2009) Grant Disbursed Till Date Loan Disbursed Till Date Total Funds Utilised Till Date Rs./Nu. 31.192.2.684.360 million Rs. of India (GOI) November 11.600 million (as revised in June 2002) .503 million (Total ./Nu.5.06.1. Punatsangchhu I Hydroelectric Project Authority * Basochhu Lowerstage formally taken over by the Upperstage from July 1.1.600 million ./Nu./Nu.421. 2008 November 10.1.27 million) Euro 31.5.00 million (30.Rs.GOI Euro 30.GOI.2 million for Transmission works upto Bhutan-india Border Intial Budget Outlay and Estimated Cost Rs.33.44 million Nu.1.9 million for generation Rs.79 % Interest 6.33.80% TA Grant (GoA) 90.ANNEX V Table 3.5. ATS is converted to Euro.638.3 million) Euro 0.074.742.2.75% interest) Govt./Nu.142 million Rs.Nu.355 million (anticipated cost-tocompletion) Rs. 1997 October 31.96% Loan 13.843.843.53 million) Euro 31. 1995 LOWER STAGE BASOCHHU* September 13.16.708 million) Euro 31. 2001 Official Austrian Export Promotion Scheme (Govt.1.440 million) Source: DGPC. 2001 24 MW 37. Additional RGOB contribution of Rs.777.094 million Rs. 2007 1020 MW 60% Grant 40% Loan (9% simple interest) GOI 27-Sep-95 First Phase (3 units of 45 MW): September 2001.080.1.08 million (Nu.74% Grant 48.25./Nu./Nu.70% Soft Loan (GoA) 2./Nu.00 million Rs.1. 1994 UPPER STAGE BASOCHHU April 14.Nu.41.06.240 million Euro 30./Nu. 2002 September 8. of Austria (GoA) November 6. 2005./Nu.417. 2015 1200 MW 40% Grant 60% Loan (10 % interest) Rs.1. Second Phase (1 unit 15 MW): May 2002 60 MW 60% Grant 40% Loan (10. 4.43./Nu./Nu.23 million Rs.Nu.23 million Nu.97 million (RGOB) (Total .113.550 million Euro 25.97 million (RGOB) (Total ./Nu.192./Nu.95 million Nu.440 million) Euro 13./Nu. of India (GOI) October 1. 2004 40 MW 2. 2007 Donor Commencement of Construction Date of Completion Energy Capacity upon Completion Terms of Finance Govt.8 million Cost of Construction Rs.42./Nu.5 % RGOB PUNATSANGCHHU-I July 28.655.RGOB Nu.95 million Nu.073.626.14.9 million (Nu.2008) Rs. of Austria) March 20.47.2. cost 2006) Rs. Summary of Operations of Major Hydropower Plants in Bhutan ITEM Date Contract Signed TALA March 5./Nu.33.84 million (RGOB) (Total .05 million (Nu.Nu.00 million (at 1993 price levels) Rs. . 1997 March 31.270 million (Estd.3 million) Rs.209 million (till 30.84 million (RGOB) Total .40 million Rs.

detailed analysis is otherwise excluded. Total External Debt The outstanding stock of Bhutan’s external debt stood at an equivalent of USD 840.0 0. FY 2009/10 1.0 0. In accordance with the international accepted definitions of the International Monetary Fund.7 percent from 2008/09. and Rupee denominated debt which grew by 6. Public/sovereign external debt represents external debt obligations of the government and is computed with that of debt guaranteed by the government (public guaranteed debt).0 25.0 100. also furnishes information on budgetary external grants.0 40. Of the total.0 10. private external borrowing refers to external debt guaranteed by and payable by nongovernment entities (on commercial terms). Ministry of Finance (public and publicly guaranteed debt).0 1991-92 1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-06 2007-08 2009/10 (p) % 120. Ministry of Finance.0 15.0 80.1 percent.0 20. Additional statistical tables featuring Bhutan’s external debt are presented in the Statistical Section. EXTERNAL DEBT Primary external debt data are sourced from the Department of Public Accounts. The present stock of external debt comprises of convertible currency debt of USD 352.In this report. long-term debt is defined to include external debt with a maturity of more than one year.9 percent were convertible currency loans and the remaining 58. Projections on BOP and debtrelated statistics are provisional and computed as part of the World Bank/RGOB Medium-Term Fiscal Framework (MTFF) exercise. The Department of Public Accounts. and short-term external debt refers to external debt with a maturity of less than one year. This year’s Status Report is exclusive of domestic debt data.5 million and Indian Rupee debt of INR 22.0 -20. the change in debt stock can be explained by the growth in both outstanding convertible currency debt which grew by 1. Indian Rupee denominated debt (mostly for hydropower development).ANNEX VI BHUTAN'S EXTERNAL DEBT: A Status Report. Selected External Debt Indicators 35.0 Debt Outstanding Growth (right hand) Debt Service/ Current Receipts Debt Service Ratio GDP growth rate Debt/GDP (right hand) .8 percent from the previous year.0 20.7 million at the end of June 2010.4 percent during 2009/10.0 60. 41. To the extent that non-budgetary grant statistics are referenced.0 5.0 30. and from private sector borrowing entities through the RMA’s BOP Enterprise Survey. increasing by 5.8 billion. In terms of its components.

8 c. Exchange rate used for conversion: fiscal year average.3 million in disbursements for the year 2009/10.1 External Debt Outstanding: Fiscal Year Position End of Period Rupee/Ngultrum Million US $ Million Item 2007/08 2008/09 2009/10 2007/08 2008/09 2009/10 1.5 41.0 12556.2 332.7 15878.7 13951.1 625. World Bank 3839.4 47. However.3 15.2 e. IFAD 1072.0 0.5 2702. International Financial Statistics (IMF).0 269.3 a.6 18948.0 0. Gross Total Convertible Currency Debt As a % of Total Debt Rupee Debt As a % of Total Debt Exchange Rate Ngultrum to 1 USD 18948.3 h.3 37952.GoI f. The bulk of total loan disbursements remain focused on expanding the hydropower sector.5 121.3 32.4 26. Kurichhu Hydropower Project c.5 340. Outstanding Debt = (Total Disbursement .7 27. JBIC 1.7 b.I Project e. SBI OD Facility 4.6 26.2 98.7 42.0 917. .5 Public 13491.2 107.6 12.0 0.9 6361.0 3000.4 0. Royal Monetary Authority of Bhutan & private sector enterprises.3 39222. Bhutan has had only public and publicly guaranteed debt (on largely concessional terms) outstanding to its multilateral and bilateral donors until 2002/03. Convertible Currency Borrowing 14117.0 0. Debt outstanding at the end of each fiscal year.9 g.7 56.0 0. Meanwhile.ANNEX VI Since the 1998/99 amortization of the commercial loan for the purchase of the Druk Air plane.5 10. of Denmark 703.7 0. ADB 4896.0 f. Standby Credit Facility .8 19.9 0.2 11.9 480.3 21400. Punatsangchhu .0 1493.1 488.4 22777.2 0. disbursements towards the Punatsangchhu I hydropower project.1 33065.4 43.0 27. and as of June 2010. which grew to USD 12.4 13. which commenced June 2008.7 346.6 64.0 0.8 46. 3.3 481.9 40.9 15886.9 5023.7 Source: Department of Public Accounts.3 819.4 57.3 118.0 1120. doubling during 2009/10.7 352.4 346. Govt.0 1628.4 d.1 5215.5 17.2 0.2 0.7 10. EFIC Australia 0.4 10.0 1306.2 95.5 469. continued to boost Rupee loan inflows.8 21400. Chukha Hydropower Project b.8 664. 3.0 46.4 0.5 16444.2 794.0 Private 3. 1.2 566.9 58. 2.0 0. although recent developments also indicate steady growth in debt flows related to the communications sector.4 percent of Bhutan’s total convertible currency loans (USD 12.5 136. both the Royal Government and the Bhutanese private sector has borrowed externally on more commercial terms.9 447. since then. of Austria 2970.9 0. Govt.0 3000. KFAED 9.1 109. Tala Hydroelectric Project d.4 1276.0 380.9 0.3 15346. Rupee Debt a. Table 1.0 0.4 349.7 1298.5 3068.0 37.6 64.1 million) constituted long term private commercial borrowings by the Bhutanese private sector.3 292.9 40.4 22777.2 349.4 352.7 13.0 334.7 2225.0 24.6 653.2 57.Principal Repayment).6 4601.4 16551.2 840.6 62.7 5660.0 1500.5 73.

2 percent interest per annum. Short-term external debt has witnessed a considerable increase in the past 3 years on account of non-budgetary Rupee borrowing. remained relatively high in line with the previous year’s ratio. Since 2007/08. has contributed to the sharp increase in the debt service payment package in recent years. debt service payments as a percentage of current receipts remain high at 27.1% Millions of USD Convertible currency Rupee Bhutan’s external debt has been summative over the years to fund a range of infrastructure and public social sector works.4 percent in 2009/10 from 28.3 billion standby credit facility with the Government of India at an interest rate of 5 percent per annum.5 percent in 2009/10 compared to that of 30.4 percent in the previous year. The external debt service ratio. In comparison to the early 2000s. at 29.9% Rupee Debt 58. the RGOB has resorted to Rupee borrowings from the SBI under a short term overdraft facility payable with 9. This reflects repayments on Rupee borrowings at more commercial terms availed by the Royal Government during the year through the State Bank of India (SBI) overdraft and GoI standby credit facilities. .5 percent as at the end of June 2010. This coupled with the FY 2008/09 RGOB negotiated Nu.5 percent in the previous year. Bhutan’s debt burden indicator as a percentage of GDP has improved from a peak of a 108.7 percent in 2001/02 down to 63.ANNEX VI Composition of External Debt Outstanding (End of FY 2009/10) External Debt Outstanding 900 800 700 600 500 400 300 200 100 0 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 (p) CC Debt 41. Similarly. a liquidity monitoring ratio.

0 49.3 72.0 107. Debt-GDP figures are derived using Ngultrum figures. Debt-GDP figures are calculated using the GDP figure for the previous calendar year.2 160.2 169.5 11.4 304.7 20.6 56.7 67.1 8.5 19.0 70.2 4. Figures for debt service and interest payments are calculated on a cash basis.5 41.1 27.ANNEX VI Table 1.4 62.7 15.8 43. the anticipated expansion in external debt is expected to be driven primarily by the flows of medium and long-term debt.6 3.3 80.7 430.4 65.3 61.1 27.9 59.5 51.4 100.9 9. 5.7 41.5 665.4 5.9 47.9 183.6 9.1 9.8 Debt/ Current Receipts 145.5 128.4 7. Similarly. which are expected to commence in 2010/11.5 102.2 22.1 58.9 58.2 15.8 70.4 6.8 1245.4 1. previously termed as private transfers.8 4.2 Debt/ GDP 50.2 6.5 152. Differences in data in this table compared to past published time series data are due to revisions in the balance of payments and GDP data.8 40.8 6.9 108.8 44. albeit slower than Rupee debt.0 24.7 7.2 Selected External Debt Indicators Year 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009/10 (p) Debt Service/ Interest/ Current Current Receipts Receipts 5.1 4.1 4.7 69.2 49. 3. 4.8 8.3 2.9 32.9 56.3 6.3 52.6 42.1 29.3 10.7 39.8 38.6 57.1 10.1 1.8 7.6 40.4 60.8 48.0 16.9 115.6 336.5 108.4 44.4 6.7 11.3 43.7 42.3 3.0 910.5 1.0 96.9 51.8 67. mostly new GoI Rupee loans towards the construction of the Mangdechhu and Punatsangchhu II hydropower projects..8 16.8 30. Bhutan’s convertible currency loan portfolio is also expected to grow.4 30. led by growth in multilateral debt and the Dagachhu power-related loan from a consortium of 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 local and foreign investors.8 68.2 11.0 50.3 18. 2009/10 (p) .5 31.8 55.9 40.5 (In Percent) Convertible Rupee Debt/ Debt Currency Debt/ Total Debt Service Total Debt Ratio 59.5 2.9 127.5 6.4 3.4 6.9 96.0 3.6 18. Debt Outstanding as % of GDP 150 200 100 100 50 0 0 -100 % Non-Hydropower Debt Hydropower Debt Real GDP growth Growth in power related debt (right hand) Growth in non-power related debt (right hand) Bhutan’s external debt is projected to grow at an average of about 21 percent for the remainder of the 10th FYP and an estimated 22 percent during FY 2010/11.0 6. Debt Service Ratio is equal to total debt service payments in percent of the total exports of goods and services.9 16.2 3.5 55.4 2. Current receipts exclude official transfers (grants) and receipts of INGOs.4 4.1 28.1 98.3 40.3 24.7 57. In addition to ongoing loan portfolio disbursements.7 86.1 63. the 2008 GDP figure for Fiscal Year 2008/09.e.3 9.8 9.5 7.9 50.2 3.6 42.9 646. 2.7 34.5 41.6 97.0 6. i.4 18.3 64.

Bhutan’s FY 2009/10 revised budget outlay was marked up to Nu.30.16.4 794. Of this amount.7 3351. On the other hand. while others in the education.4 percent and capital expenditures. . Revised estimates for domestic revenue mobilization for 2009/10 was placed at Nu. Borrowings ii. EXTERNAL DEBT AND THE BUDGET Nu.9 billion. telecom and urban development spheres were beginning to gain ground.5 Year 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 External Debt Annual Change Outstanding (USD Millions) (USD Millions) 466.2 2010/11 (estimate) -4805. Bhutan’s outstanding external debt grew at an average of 9. extended by an additional year).4 Composition of National Budget Financing 12000 10000 8000 6000 4000 2000 0 -2000 35000 30000 25000 20000 15000 10000 5000 0 Millions of Ngultrum External grants External borrowing Total debt service Expenditure outlay (right hand) Domestic revenue (right hand) According to the FY 2010/11 provisional budget estimates.3 -41.3 674.4 billion from 2009/10.8 723. its growth peaking during 2003/04 and 2005/06. more than enough to meet current expenditures totaling Nu.8 46.8 840.2 3433.2 1003.15. the residual 54.3 66.6 2287. Repayments b) Resource Gap Source: Department of National Budget.8 -56.6 billion). as in the past.6 percent (Nu.5 billion. where the Basochhu and Tala projects were nearing completion. Furthermore. Millions Financing the Budget Deficit Fiscal Deficit (-) / Surplus (+) a) Net External Borrowing i.5 657.ANNEX VI 2.6 141.5 607. sovereign debt service payments (principal and interest) towards external outstanding debt have been budgeted up to Nu.1 105.4 -24. During the 9th Five Year Plan (2002/03-2006/07.1 95.1 percent per annum.3 819.3 2944. grant aid and concessional loans from India and other bilateral and multilateral sources supplemented domestic revenues to finance a significant portion of the government’s capital expenditure. a major part of the resource gap to finance capital expenditure has been sought through external borrowings and aid on concessionary terms.8 2348. Notably. those years coincided with expanded development activities in the energy sector.8 billion. 2009/10 (revised) -4090. current expenditures accounted for 45. The Royal Government has followed a cautious fiscal approach to development.13.1 3801. a cornerstone of which has been the policy to meet current expenditures through domestic revenue collections.7 780.

Disbursements in the agriculture and financial sector accounted for 3. Convertible currency multilateral debt outstanding has increased over the years to USD 272.8 percent. Loans for communications sector development amounting to USD 12.7% Industry 2.2 million equivalent.2 and 3. bilateral.1 percent.4 billion convertible currency and Indian Rupee loans have been disbursed to Bhutan by various foreign governments.5% Bhutan’s first concessional loan can be traced to 1981/82 with the first SDR loan disbursement from IFAD for the development of the Small Farms Project. This is followed by the ADB (Table 3. Since then.2. and particularly rising private sector related debt and other Rupee debt.4% 5.4% In terms of the sector-wise allocation.4 percent of the total external loans were disbursed to the power sector. as of June 2009.2. followed by the communications sector with 7. and the education sector received USD 3. of which USD 10. 46.9 million was disbursed by the ADB under the Road Network Project.1) with USD 136.4% Power 46. Outstanding debt to the Government of Austria for the Basochhu hydropower project totaled USD 57.4 percent of total Rupee outstanding debt. For the year ending June 2010.7 million during the year.ANNEX VI 3. an equivalent of USD 1. international multilateral.8% 3.21. or 93. Debt service payments are still being made on this loan.7 million. For the year 2009/10. respectively.4 percent of total external debt as of the year 2009/10. Creditor Classification Creditor Classification of External Debt 100% 80% 60% 40% 20% 0% 2003/04 2004/05 2005/06 2007/08 2008/09 2006/07 2009/10 A creditor-wise classification of Bhutan’s external debt is presented in Table 3. Multilateral (convertible currency) Bilateral (Rupee) Bilateral (convertible currency) Other (cc and Rupee) .8% Health 0.2 percent of overall external debt at Nu. Other 31.2.4 and 2.1 million or 32.8 percent and the education sector with 5.9 million.1.3 billion. and private financing agencies.1% Financial Sector 2. 3.4 million and the World Bank with USD 107.2. 3. the GoI was Bhutan's largest creditor with 54. Its share has decreased gradually over the years in line with the expansion of bilateral Rupee debt. the highest disbursement of loans was accorded to the power sector to the tune of USD 70. CLASSIFICATION OF EXTERNAL DEBT Sectoral Disbursements Sector Share of External Loans: 1981/82-2009/10 Commun Educatio ications Agri n 7.3.3 million came in second.

4 8.5 41.0 95.9 26.2 2.2 46.1 27.9 10.9 17320. Multilateral Asian Development Bank EFIC (Australia) IFAD KFAED World Bank (IDA) II.1 106.8 0.0 0.4 229.2 25.3 100.0 0.6 33.0 18.0 23.0 26.1 234. Loans are cumulative from year of membership.2 13.7 0.5 0.2 0.0 19.3 20483.0 0.6 17.2 107.7 57.5 346.2 109.0 0.2 17.8 14.5 3.7 9.1 57.0 21.6 0.7 2.1 ADB Cumulative Lending to Bhutan Bhutan: Cumulative ADB Lending as of December-end 2009 Sector Agriculture & Natural Resources Education Energy Finance Health & Social Protection Industry & Trade Transport & ICT Water Supply & Other Municipal Infrastructure & Services Multisector TOTAL Source: ADB Annual Report 2009.0 5.8 18400.0 106.9 0.8 100.3 (In percent of Total Convertible Currency/Rupee Outstanding Debt) Convertible Currency Creditors ADB EFIC Government of Austria Government of Denmark IFAD KFAED World Bank Others Rupee Creditors Government of India State Bank of India 40.9 14222. .8 5.5 4.9 7.5 272.7 13.0 27.1 % Share 3.1 4.5 3.7 243.1 9. Rupee Debt Government of India State Bank of India End of Period 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 (In Millions of USD and Rupees/Ngultrum) 294.0 34.0 Table 3.2.1 917.5 1.3 57.1 0.2 18369.2 External Debt Outstanding by Individual Creditor Category Creditor Category A.4 6.1 136.8 282. 1982.9 7.4 8.4 91.2 4.0 39.0 14222.1 0.9 0.8 18400.3 28.0 27.6 76.5 82.4 80.4 18.7 0.7 0. Bilateral Government of Austria Government of Denmark III.6 1.5 0.4 2.5 0.4 10.8 0.3 16603.7 0.2 95.1 103.4 123.7 0. Other B.0 34.7 0.7 100.0 40.3 38.0 1.4 64.2 121.3 1500.0 0.1 210.0 2.7 68.2 57.0 0.9 8.3 0.3 0.ANNEX VI Table 3.6 349.0 19.7 100.0 5.6 0.1 302.6 12.4 254.6 118.2 68.2 3.7 0.4 21277.9 23.5 10.9 64.7 57.9 18948.0 10.6 Source: Department of Public Accounts & private sector enterprises.9 0.5 308.7 22777.2 77.0 7.1 29.1 91.1 30.1 8.6 0.4 93.7 100.6 34.4 120. Loans Awarded 2 2 5 5 1 1 4 3 2 25 Amount (USD million) 7.5 27.0 73.5 146.3 12.0 16.0 0.2 18369.4 15.4 256.4 0.6 0. Convertible Currency Debt I.8 59.9 17.4 21400.0 16.0 0.7 4.7 368.3 0.2 13.3 16603.0 1628.0 31.3 3.9 352.8 5.0 26.3 7.0 4.0 20.1 31.6 79.2.2 16.

3 57.1 29.8 52.7 36. 3.5 1.4 8.7 372.4 2004/05 34. the share of other concessional and SDR-denominated debt from the ADB.2 52.2 (% of Total External Debt) 2005/06 2006/07 2007/08 2008/09 36. This includes (i) cc private non-publicly guaranteed debt and (ii) SBI Overdraft Facility (publicly guaranteed debt).2 229.5 17.4 29. However.0 0.8 0.7 6.4 9.5 9. Continuing its previous trend. Bilateral (Rupee) III.1 57.1 313.3.1 1.7 254.8 0.4 0.2 234.2 11.8 54.6 0.0 32.3 Source: Department of Public Accounts & private sector enterprises.0 2.6 57.3 840. Rupee denominated debt continues to comprise over 50 percent of Bhutan’s external debt portfolio.1 4.2 8.5 55.9 1.7 1.1 52.7 210.3.1 Currency Composition of External Debt Currency SDR US Dollar Indian Rupees Euro Kuwaiti Dinar Norwegian Kroner Yen 2003/04 37.2 8.0 28.4 11. the share of this currency in Bhutan’s total debt is expected to grow in the next few years on account of the ADB’s new loan towards the Dagachhu power project from 2009/10.6 33.4 415. Other (cc and Rupee)1 Total External Debt 57. Bilateral (convertible currency) II.0 674.3 1.2.1 1.2 34.5 8.3 282.2 32.1 243. Multilateral (convertible currency) IV.4 29.8 819. Meanwhile.0 607.6 0.7 8.8 1.7 0.8 2007/08 2008/09 2009/10 91. 1) Includes non-bilateral and nonmultilateral debt outstanding.1 0.2 2.9 58.2 77.0 1. Table 3.7 1.2 456. IFAD and the World Bank remains consistent in its one-third composition of debt.1 44. debt owed to the Government of Austria for the Basochhu hydropower project in Euro-denomination has declined with the commencement of debt servicing along with the absence of new loans since the project completed in 2004.0 0.9 32.1 0.1 80.6 55.0 429.1 794.3 External Debt Outstanding by Creditor Category Creditor Category (In millions of USD) 2003/04 2004/05 2005/06 2006/07 I.8 411.4 10.0 17.2 55.3 51.1 1.0 57.7 Percentage Share of Total External Debt Bilateral (convertible currency) Bilateral (Rupee) Multilateral (convertible currency) Other (cc and Rupee) 9.0 56.8 9.ANNEX VI Table 3.3 8.4 11.3 0.0 0.1 54.0 2009/10 32.1 8.9 428.1 272.3 68.3 11.6 723.5 780.4 51. On the other hand.3 68.4 5.1 0.5 37. External Debt by Currency Composition Disbursements of Indian Rupee loans till date have largely traced developments in the hydropower sector in Bhutan.0 .

0 Others 290. . (Japan) EFIC Australia West LB Ltd.7 Power 571.ANNEX VI Table 3.6 35.6 10.8 53.9 11.0 50.2 Creditors Ranked by Cumulative Disbursement: 1981/82 – 2009/10 Millions of USD Sector Agency Government of India* Asian Development Bank World Bank KFAED Government of Austria Government of Denmark IFAD Mitsui & Co.8 1.0 40.5 22.9 5.2 449.6 10.7 0.8 1.7 16. IFC 30.8 22.9 665.0 0.1 147.3.7 21.8 176.2 Total 654.0 112.2 23.5 290.0 4.8 10.7 * The exchange rate used for conversion is based on the FY average and also the simple average of FY averages for the 15-year group (1981/82 .0 53.2 72.9 27.9 15.2 Other 78.3 48.1 19.8 1433.5 71.7 0.8 22.5 Total 48.8 10.8 Agriculture Communications Education Health Financial Sector Industry 5.1 39.1995/96).8 7.9 30.0 16.

Similarly.3 percent in 2007/08 and to 29. DEBT SERVICE The debt sustainability of any country is External Debt Service determined by its ability to service all its foreign debt and publicly guaranteed debt. this would place Bhutan in the highly-indebted range. Yet despite Bhutan’s huge dependence on power-related exports and foreign aid. with repayments remaining high at INR 7.4 million from USD 12. a majority of which were principal repayments by the RGOB on the SBI OD facility. it is Rupee principal (right hand) essential to note that both debt and nondebt indicators can be used to estimate a country’s level of liquidity and solvency. is second after Maldives at 71. a country’s ability to service its of Nu. fiscal Rupee interest (right hand) revenues and expenditures.5 percent in 2009/10. Bhutan's debt service ratio measured as a percent of the export earnings from goods and services has remained on the lower spectrum for the most part of the last decade. the mix of loans and grants in Repayments relation to all projected BOP flows. This takes place despite the subsequent increase in power-related export levels. 10000. Of this amount.0 situation. Rupee debt service on hydropower debt including Tala and Kurichhu remained steady at INR 3. Bhutan’s debt service ratio has grown considerably to 18. Bhutan at 63. persistent current account deficits and growing fiscal burden.5 percent of GDP.4 percent. without undermining its macro6000. due to an uneven expansion in commodity and services import coupled with a smoothing out of the growth in exports. debt service on convertible currency loans in 2009/10 grew to USD 20.0 development goals. 7000 6000 5000 4000 3000 2000 1000 0 Debt servicing (repayment of principal plus interest) on both convertible currency and Indian Rupee debt expanded to an equivalent of USD 180.8 million in 2009/10 from USD 174.4 percent in 2009/10. debt servicing on Rupee denominated debt remained the key contributor to the overall expansion in total debt service. By international standards. Even in terms of the magnitude of the external debt burden.0 8000. However.7 billion as of 2008/09. Meanwhile.7 million in 2008/09.9 to 19.0 international benchmarks that assist nations to monitor their debt levels. it is believed that Bhutan’s external debt is largely sustainable but subject to a “moderate risk of distress.5 billion from INR 7.0 economic objectives and long-term 4000. with other SAARC members below 50 percent.ANNEX VI 4. Meanwhile. where highly indebtedness is marked at higher than 50 percent of national income. Millions Moreover. overall debt service as a percentage of current receipts (which excludes official transfers and INGO receipts) remained high at 27. 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 . Since the focus of this feature is that of Bhutan’s external debt 2000.1 billion per annum. there are several indicators and 0. From 2007/08 with the commissioning and commencement of debt servicing on the Tala project.7 percent (the highest with that of Pakistan).7 million in 2008/09. other SAARC countries’ ratio remain within the range of 0. short-term and long-term. external debt will depend on its debt Interest burden.0 domestic and external.” This is underlined by the self-liquidating nature of hydropower development which underlines the substantial build-up in Bhutan’s external debt.

Convertible Currency Commercial Debt IV.9 2.62 1.28 0.4 4.59 37.76 38.8 18.6 3.21 12.88 1.97 135.90 0.83 8.89 6.25 0.4 6.91 0.75 0.00 4. Rupee Debt Total Interest Payments Total Principal Repayments Total Debt Service 2.92 3.61 2004/05 Interest Principal 2. income and transfers.5 28.75 9.22 1.1 4.6 8.85 4.1 22.94 (Ratios) Debt Service Ratio* Debt Service/Current Receipts** Interest Payments/Current Receipts Debt Service/Gross Reserves 6.40 1.6 29.75 0.85 119.29 2.08 174.42 2.7 7.20 4.58 75.9 16.74 6.93 22. Please note: Inconsistencies may occur due to rounding. Multilateral (Convertible Currency) II.3 16.00 3.93 3.84 180. .00 0.8 4.16 0.1 Bhutan’s Debt Service Payments by Creditor Category 2003/04 Interest Principal Creditor Category I. Bilateral Convertible Currency III.87 1.81 (In Millions of USD) 2.22 44.13 9. **: Current receipts include receipts from the export of goods and services.44 2008/09 Interest Principal End of Period 2009/10 Interest Principal 2.46 128.42 0.98 2005/06 Interest Principal 2.8 2007/08 Interest Principal 2.8 3. excluding official grants and receipts of International NGOs & international organizations.2 30.82 43.69 5. *: Debt service payments as a percentage of total exports of goods and services.78 6.8 8.46 1.85 33.67 3.73 Source: Department of Public Accounts & private sector enterprises.8 6.ANNEX VI Table 4.0 3.79 5.4 1.01 10.65 137.64 19.8 20.32 0.92 36.01 1.00 0.48 3.16 8.2 11.4 1.59 4.40 2006/07 Interest Principal 2.1 18.15 8.78 2.02 0.2 4.67 0.24 3.5 27.36 66.93 1.82 16.00 0.00 0.78 4.77 0.4 6.14 124.73 3.74 0.

3% Health & Edu.5% Agri. Over the years. Agencies 24. 20% Others* 24. Notably.1 percent) and energy sectors (11 percent). 11.8 million were received from DANIDA.4 percent).9% Other Govt. and agriculture (11.3 percent).9 percent of total grants as of 2009/10.7 percent).5% Commun -ications 28.734.0% Source: Department of Public Accounts. followed by the Government of Austria (1. the health and education (17. .5 percent). 8. and JICA (2. the GoI is followed by DANIDA (9.5% Auto.2 percent of the total expenditure. followed by the health and education (11. the communications sectors received 28. grant disbursements to various cross-sectoral autonomous agencies constituted 5.8 percent) and the UNCDF (1.7% Agri.8% Other Govt. excluding non-budgetary support for the power sector) and 60. For the year 2009/10.6% Health & Edu.9% Power 12. grant support has reportedly financed 34.1% Power 11. good governance and women’s empowerment programmes. the top three recipients during 2009/10 were the Royal University of Bhutan.ANNEX VI 5. Government of Netherlands (3.2 percent) sectors have been the largest recipients of international grant assistance since 1990. The GoI remains Bhutan's largest grant donor at 72.2 percent of grants totaling Nu. there has been a discernable yet marginal expansion in the direction of grant aid besides traditional sectors towards trade and industry and autonomous agencies activities.9 percent). 0. Royal Institute of Health Sciences and the Royal Institute of Management.3 percent of all grant inflows for the year 2009/10 (program and budgetary grants.7% Auto. Please note that there may be differences in grant data reported here and the fiscal report as reported by sources. Of the latter. Grant aid from the Government of India and other international donors have traditionally financed on average over one-third of the fiscal outlay.1% Culture & Youth 3. *) Others: includes GoI program grants in addition to other miscellaneous grant items.7% Others 15. 5. In the latter category.5 percent). Agencies 19.3 percent of all cumulative grant disbursements since 1990/91.8% Trade & Industry 0. 9.2% Culture & Youth 2. During 2009/10. communications (13 percent). In the revised estimates of the 2009/10 budget. GRANT ASSISTANCE Sector Share of Grants: 2009/10 Sector Share of Grants: 1999/00 Commun -ications 4. Sectoral analysis indicates that besides the hydropower sector (8. 3. including information technology.8 percent of all grant disbursements.6% Trade & Industry 1.

ANNEX VI

Table 5.1 Individual Grant Donors: 1999/00 – 2009/10
Millions of Ngultrum Agency Govt. of India DANIDA JICA Govt. of Nederlands UNDP Govt. of Austria HELVETAS Swiss Dev. Cooperation EEC UNCDF World Bank, IDF, IDA Others Total 1999/00 2187.9 318.7 7.1 74.4 140.8 143.0 75.8 106.2 29.9 10.6 13.3 166.4 3274.1 2000/01 2551.2 394.8 0.0 147.6 51.4 174.2 94.3 66.8 18.0 27.2 0.0 185.4 3711.0 2001/02 945.3 534.8 4.2 274.5 134.4 44.2 0.0 62.6 112.5 26.9 11.8 545.9 2696.9 2002/03 2631.8 525.8 0.0 201.0 114.2 68.7 0.0 103.5 130.8 26.6 28.6 650.7 4481.7 2003/04 2287.2 579.2 50.0 331.7 115.1 32.7 0.0 122.5 203.0 25.1 17.5 692.2 4456.2 2004/05 2370.5 432.1 22.5 253.9 118.1 56.6 16.9 46.9 54.3 0.0 35.3 379.9 3787.0 2005/06 3087.3 539.0 0.0 234.1 102.4 61.9 32.9 71.4 82.4 0.0 771.2 440.3 5422.9 2006/07 3081.2 454.7 9.2 136.3 109.9 66.0 0.0 61.0 69.6 23.7 662.9 379.9 5054.3 2007/08 4671.1 462.5 0.8 27.0 63.8 6.3 16.2 35.7 20.1 0.0 42.0 586.4 5931.9 2008/09 4394.9 513.1 0.9 20.6 116.8 212.2 34.4 70.2 8.5 0.0 190.5 950.3 6512.3 2009/10 6439.5 734.8 0.0 0.0 124.4 159.0 78.6 22.2 86.2 135.2 0.0 1129.1 8909.0

Percentage Change on the Previous Year Total 0.4 13.3 -27.3 66.2 -0.6 -15.0 43.2 -6.8 17.4 9.8 36.8

Source: Department of Public Accounts.

ANNEX VI

Table 5.2 Sector-Wise Classification of Grant Assistance: 1999/00 – 2009/10
Millions of Ngultrum Sector Period 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 Total Sector Total Agriculture Communications 238.5 212.4 475.1 474.9 780.9 255.9 521.2 388.3 572.3 649.5 309.8 7810.9 11.2 357.2 363.6 379.0 426.8 329.6 218.9 532.2 216.3 1327.0 488.7 2565.5 9089.7 13.0 Culture & Youth 57.6 69.1 128.2 105.5 75.3 10.5 11.2 136.5 85.9 20.0 273.8 1254.2 1.8 Health & Education 367.4 422.3 599.6 629.2 465.2 808.8 945.2 1458.2 974.6 1997.0 991.6 12155.8 17.4 Power 458.0 323.0 653.6 395.2 421.8 191.4 255.3 292.8 34.2 367.1 979.9 6083.3 8.7 Trade & Industry 28.0 12.1 47.8 24.7 30.0 104.7 52.4 28.5 69.8 321.6 119.2 925.1 1.3 Other Govt. Agencies Autonomous Others* 951.8 1486.2 371.4 398.7 439.3 417.5 1319.0 1061.5 1695.5 744.2 1741.6 13075.4 18.7 15.6 21.3 42.1 26.7 90.0 28.9 86.4 372.1 72.6 1924.1 527.5 3301.5 4.7 800.0 800.0 0.0 2000.0 1824.0 1750.0 1700.0 1100.0 1100.0 0.0 1400.0 16175.0 23.1 Total 3274.1 3711.0 2696.9 4481.7 4456.2 3786.7 5422.9 5054.3 5931.92 6512.26 8908.97 69871.8 100.0

Percentage Share of Total Grant Aid

Source: Department of Public Accounts. *) Others include program grants from the Government of India (except during 2008/09 due to changes in classification).

ANNEX VII

SUMMARY OF PETROLEUM IMPORTS AND PRICES IN BHUTAN Recent volatility in the prices of petroleum and related products in Bhutan have been a reflection of corresponding price and policy changes in India, which in turn have been influenced by global developments. For a small developing country such as Bhutan, heavily dependent on oil imports for consumption and industry, volatile fuel prices continues to remain a grave concern. While Bhutan possesses tremendous potential to harness and generate hydropower, its dependency on fossil fuels will continue to pose serious constraints on national policy. Fuel prices in Bhutan are regulated based on the invoice price, and taking into consideration other cost factors in importing fuel products. Therefore, any revision in the price of the products at source immediately impacts prices in Bhutan. Moreover, in addition to the transportation costs, shrinkages allowance, dealers’ commissions, depot surcharges, and product transit insurance, a five percent sales tax is also levied. Kerosene and liquid petroleum gas (LPG) are presently subsidized by the RGOB. Bhutan imports most of its finished products of petroleum and related oils (diesel, petrol, kerosene, lubricating oils, and liquid petroleum gas) from India. In 2009, the growth in the import of oil in terms of volume and value has increased by 11.4 percent and 8.6 percent from negative 5.4 percent and 4.1 percent in 2008, respectively. As a percentage share of oil imports, diesel accounts for 62.3 percent, followed by petrol at 19.1 percent, and LPG at 5.7 percent. The remaining imports were on account of kerosene, furnace oils, ATF (jet fuel) and lubricating oils. In 2009, high-speed diesel continued to be among Bhutan’s top ten imports. During the year 2009, the growth 14 3500 in oil imports from India expanded in terms of both value and volume 12 3000 mainly due to an increase in the 10 import of petrol, diesel and furnace 8 2500 oils. Petroleum and related 6 products worth over USD 61.2 2000 4 million (almost Nu.3 billion) were 2 1500 imported in 2009, against USD 0 1000 62.7 million (Nu.2.7 billion) in -2 2008. Major petroleum imports -4 500 comprised of diesel, petrol, LPG, -6 kerosene and furnace oils, 0 -8 indicating an increase in the Oil imports in Millions of Nu. (right hand) dependency on oil imports. For the % Growth in import volume year 2009, imports of major fuel % of GDP components constituted 5.1 percent of GDP and overall fuel imports comprised 14.9 percent of total merchandise imports from India. The steady growth in domestic demand for petroleum products coupled with the associated burden of the growing import bill and negative external trade balance with India presents numerous policy challenges for the RGOB.
Oil imports
2002 2003 2004 2005 2006 2007 2008 2009

%

ANNEX VII

The increased demand for diesel and petrol is also evidenced by the growing population using cars and other forms of motor vehicles imported from India and other countries. Imports of motor vehicles have been among the country’s top ten imports, with overall customs import values at Nu.2 billon for the year ending 2009. According to the Royal Safety and Transport Authority, the total number of registered vehicles in the country as of June 2010 was 48,447. With the ever-growing number of vehicles and use of heavy duty machinery in the construction sector, the consumption of petroleum products is likely to expand in the near future alongside growing economic and development activity. Although the use of oil is largely limited to the transport and services sectors, the impact of changes in its price can be felt more strongly when transmitted through the import of other goods and services. Assessing the impact of oil prices on Bhutan’s consumer price index, the consumer price index in Bhutan recorded a 6.1 percent for 2010 second quarter, compared to almost 3 percent during the same quarter in 2009. During this period, the price of electricity, gas and other fuels, which constitute 6 percent of the expenditure basket, increased by 2.5 percent against 5.4 percent during the same period last year. On the other hand, the price of fuels and lubricants, which constitute 3.2 percent of the expenditure basket increased by 5.8 percent during the year, as compared to the decline of 1.4 percent during the same period last year.
Composition of Oil Imports
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2002 2003 2004 2005 2006 2007 2008 2009 Diesel Petrol Kerosene LPG Others

Growth in Major Oil Imports (y-o-y, % change)
40 30 20

%

10 0 2005 2006 2007 2008 2009

-10 -20 -30 -40 -50 -60

Diesel

Petrol

Kerosene

LPG

7 1.1 Lubricating Oils 2.2 1.5 23.9 4.2 10.8 17393.7 19. N.2 115.6 2.4 Value in millions of Nu.3 4.4 59.5 2.0 694.0 51460.7 3.0 5.8 60.0 801.2 1.5 31.9 58.1 4.4 1.0 208.0 854.ANNEX VII Table 1.0 2292.281.696.1 3297.4 6.8 147.9 Lubricating Oils (MT) 1958. Figures are based on information submitted by the POL dealers in Bhutan.0 1080.955.1 14.0 . Ministry of Economic Affairs.810.4 80.0 13795.5 5.1 55. 32.9 5.1 53.4 2008 57245.0 4980.4 1. Summary of Bhutan’s Import of Major Oil Products.6 12. 340.465.0 Value in millions of Nu.0 81.9 5.1 24.6 3.8 116.0 88.4 1892.0 56.5 1.4 Furnance Oils 3.2 3.571.7 1.119.6 3887.5 26.2 1812.5 5.0 Value in millions of Nu.628. 88.0 Furnance Oil (MT) 2745.2 0.2 15.4 Petrol 12.1 23.8 Aviation Turbine Fuel (KL) 1044.1 Kerosene 12.3 0.4 105.7 62.7 3.0 1656.7 LPG (MT) 4055.5 77.0 1.8 13.0 59.0 32.8 9112.0 84.6 4.1 2.3 123.0 46.9 2003 48599.1 4. Diesel Quantity/Value 2002 43507.9 74.3 5.2 5724.0 1145.7 3.2 1.0 15216.0 34.3 19.7 6.5 18.8 5.0 10207.3 9001.1 5.6 1.5 1. 2002-2009 2004 2005 2006 2007 Diesel (KL) 50809.9 135.9 28.0 5.8 1.8 180.0 26.4 5405.0 1080.7 60.0 1.2 LPG 4.0 3934.0 450.9 92.0 Total value (million) 1.1 2009 64300.2 Kerosene (KL) 9781.6 12.0 62.4 5856.0 14370.4 Lubricating Oils 7.0 604.0 27.7 22.0 84.0 Value in millions of Nu.0 Source: POL Section.9 4.3 1008.2 1263.0 12545. 13.8 4848.8 1461.3 14.9 2.7 ATF(Jet fuel) 1.5 2081.6 828.0 1654.0 74.6 3.8 1036. 1023.9 2.4 LPG 5.1 17.0 103.645.5 97.0 58174.0 44.0 5.1 61.5 570.6 Furnance Oils 2.256.9 1455.9 1.0 119.0 Value in millions of Nu.5 1348.2 1.9 2.1 4.6 9706.3 Total volume (KL) 71.8 3.4 1096.2 5.728.B: It is assumed that MT=KL .3 62.8 84.7 2.6 5.1 98.9 20.963.4 5252.1 1.0 505.7 124.6 2.6 16.3 1.2 Octane 91 (KL) 125.0 1792.1 63.0 3414.7 59.0 24.0 603.6 1. 3.9 1026.0 94.9 1.1 1.3 10229.9 2.3 (% of Total Oil Imports by Value) Diesel 58.0 20.1 63.7 126.0 718.3 1.0 2421.0 3.8 6. 81.6 1570.8 29.0 4472.4 90.6 15.9 2.9 Petrol 18.5 ATF(Jet fuel) 1.128.0 261.0 Value in millions of Nu.7 (% of Total Oil Imports by Volume) Diesel 61.7 Petrol(KL) 11800.0 4016.7 5427.0 52418.0 655.0 16781.1 4.5 594. 65.620.3 54.3 3767.2 61.0 38.9 21.9 19709.5 2.8 51.8 18.9 5.1 3.0 Value in millions of Nu.081.3 5.0 Kerosene 6.9 4.1 2.0 60.6 36.385.7 56.6 23.5 Value in millions of Nu.6 2.5 1.4 2.

55 billion.82 billion or by 14.88 percent).2. the off-balance sheet exposures such as letters of credit.72 billion to Nu. The observations are summarized below: 1. performance bonds and other form of guarantee of the financial sector more than doubled to Nu.5. 3 Banks refers to the BOBL. and BIL) and excludes the NPPF. RICBL.0. BDFCL.11 percent during the period and stood at Nu. Business Size and Growth Total assets of the financial system2 increased by 32.0.34 billion) and Nu. However.67 percent) and is hugely attributable to the increase in the core capital by Nu. The total assets of the banks3 expanded by Nu.41.86 million a year ago.1. BDFCL. compared to Nu.ANNEX VIII REVIEW OF PERFORMANCE OF BHUTAN’S FINANCIAL SECTOR (June 2010)1 Introduction This report summarizes the performance of the Bhutanese financial sector for the second quarter of 2010 in comparison to the corresponding quarter of the previous year.44 billion increase in the net profit.83 billion in June 2009 mainly due to increase in the net loans and advances by Nu.0.88 billion from Nu.17 percent to Nu.09 billion (or by 28. The capital fund reached to Nu. BNBL.2. the non-banks’ capital base increased from Nu. These ratios indicate that the Bhutanese financial institutions are solvent and have enough capital to withstand shocks as well as to meet unexpected claims. 2010. Prepared by the RMA Financial Regulation and Supervision Department (FRSD).05 percent). Meanwhile.56 billion (by 37. The information contained in this report is based on the RMA returns submitted by the financial institutions to the RMA. TBL.29 billion at the end of June 2010.4.5. the Bhutanese financial sector is well capitalized with capital adequacy ratio and core capital ratio at 17. BIL and NPPF. Customers’ deposits of the banks were Nu.0.09 percent 15.43 billion.9 billion. DPNBL.02 percent respectively.14 billion (paid-up capital of new banks by Nu.39. 2. T-Bank Ltd.2.1.72 percent during the period. comprising mostly of corporate deposits (63. this report does not reflect the true performance of the financial institutions during the period because this year’s quarter (period ending June 2010) includes the data of newly licensed financial institutions (DPNB Ltd. Nu.6. The Bhutanese financial system consists of the BOBL. DPNBL.9.53 billion in June 2010 from Nu.42 percent) during the period under review where as non-banks’4 assets rose by Nu.11. 2 1 . TBL and BDFCL.37 billion (or by 83. Meanwhile. Borrowings of the NBFIs (including BDFCL) increased by 48. which were largely financed from domestic sources (about 87 percent).61 billion at 30 June. Capital and Reserves At the end of the second quarter of 2010.55. BIL and NPPF.67 billion higher than at the end of June 2009. The increase is mainly seen in banks with almost Nu. 4 Non-banks refers to the RICBL.

78 billion from Nu.60 percent while the NBFIs hold the remaining 9. The remaining assets include equity investments.37 In percentage 15 10 5 0 Jun-10 Jun-09 Jun-10 Jun-09 RWCAR (10%) Banks Non-banks Core CAR (5%) Total FIs 3.4.25 15.26 billion or by 22.34 billion or by 83.40 percent.41 percent).75 percent.99 percent shares. mainly driven by the increase in the demand for housing loans.2. reflecting the gradual transformation of the Bhutanese economy from one based on largely subsistence agriculture to a growing and modernizing one. with 17.11. followed by the manufacturing and industry sector.24.1. This expansion was mainly driven by a solid increase in the assets of the commercial banks (Nu.20 percent. making it an important component of total financial sector credit.80 percent).23 billion (or by 25. However.08 17.83 billion.42 percent) and a relatively smaller increase in the assets of non-banks (Nu.29 billion from Nu.58 percent of overall total loans and advances. Banks’ total loans and advances increased by Nu.36 percent) as against about Nu.24.42 billion (or by 20. respectively. which accounts for 25.02 13.55.22 17.ANNEX VIII Chart 1: Capital Adequacy 25 20 17.92 13. Housing sector credit.76 13. agricultural sector credit abated by 25. 4.29.17 percent to Nu. followed by liquid assets with Nu.64 19.15 per cent). Housing finance provided by the financial institutions has risen by Nu.47 17.10 billion (43 percent) increase in the total loans and advances of the non-banks. Credit Distribution by Sector During the end of the second quarter of 2010. Of the total assets.88 percent).67 16. In terms of holdings.28 billion (51.1. and trade and commerce sector.09 23. Total Assets Financial sector total assets expanded by 32.73 14. the financial sector credit portfolio increased to Nu.77 (44.28. continued to lead the sectoral credit concentration. fixed and others. . loan assets (net of provision) form the major component of assets with Nu.41. the commercial banks constitute 90.09 billion or by 28.08 percent and 15.

37 15.15 17.37 percent and 17.000 N u .615.30 ri . respectively.15 percent.94 6.352.83 4.58 32.02 billion in June 2010.66 18.53 1.ANNEX VIII Chart 2: Sectoral Classifications 8.92 percent to Nu.000 0 /A H 7. Consequently.000 5.59 0.67 18.04 32.761.085.87 5.92 406.33 percent. ou ri Ho s m Tr us an sp in g Tr or an t ( sp H) or t( L) Pe rs LA on S al L S t oa af n fL oa n ED SB P AC S 29.335.21 963. Asset Quality (Credit Portfolio) The non-performing loans of the Bhutanese financial sector fell by 31.73 4.000 4.67 percent to 9. the NPL ratio improved to 10.15 percent in June 2010 from 18./T om . rv .000 3. Ag M an Tr u& In Jun-09 Jun-10 Jun-09 Total NPLs to Gross Loans and Advances (%) Total FIs Total FIs Non-Banks Total .66 percent to 40. The decrease in the non-performing loans was seen in all the financial institutions (except in one of the non-banks). The NPLs of both the banks and non-banks decreased from 18.45 percent and 15.72 4.10 37. Chart 3: Asset Quality 50 45 40 35 30 25 20 15 10 5 42.000 1.13 492.000 2.30 percent a year earlier.33 In Percentage Jun-10 Specific Provisions as a % of Total NPLs Banks Total a du S e d e/ C s.45 10.87 40. Nevertheless.78 5. the provisions as a percentage of NPLs of the financial sector increased from 32.15 percent is still high compared to the year end-figure of 2009 (6.552.55 201. and also due to the continuous monitoring and recovery of NPLs. in m illio n 6.3.15 9. Nevertheless.000 7. mainly due to the reviving of the manufacturing and industry sector.99 percent). the NPL ratio at 10.

both the demand and time deposits shared almost equal holding in the total deposits.60 billion.46 Jun-09 Jun-10 Jun-09 26.62 billion). bad loans or the nonperforming loans constituted only around 10 percent of the total loans issued.80 3.90 19.705.021.59 percent were non-performing.19.000 2.13.08 4.16 billion in June 2010 from Nu.55.25 453. which was much lower that of June-2009 (18.34 billion or 34 percent) particularly in the form of fixed deposits (by Nu. The substantial growth in the deposit base was the result of an increase in the deposits of corporate entities (by Nu. The majority of the liabilities comprised of deposit liabilities of the banks with 71. Chart 5 shows the types of deposit with the banks in Bhutan.04 percent.000 15.31 percent.11 3.ANNEX VIII 6.753.in million 20.53 percent). achieving a growth of 32.34 billion (by 29. Nevertheless. Chart 4: Loan Classification 3.90 30.83 billion in June 2009. the short term deposits (current and saving deposits) increased by only 23. followed by individual deposits (including foreign currency deposits) by Nu.640.000 25. from Nu.39.93 billion) of the non banks were performing loans and the remaining 13.94 billion in June 2009.6. 92.20 billion.10.29.112. In terms of . While the long term deposits (recurring and fixed deposits) rose by 43.95 percent were nonperforming loans.71 billion to Nu.25 percent to Nu. Distribution of Deposits by Customer Total deposits liabilities of the deposit takers rose considerably to Nu.113.466.52 percent.09 percent and borrowings of nonbanks with 6.41 per cent were performing loans and the remaining 7.37 percent). Liabilities The total liabilities of the financial sector amounted to Nu.4. 86.07 billion of the commercial banks.3.000 Jun-10 Jun-09 Jun-10 Banks Performing loans 17.985.438.41.28 NBFIs TOTAL Non-performing loans 7.000 23.818. Similarly.22. followed by capital and reserves with 12. Consolidated Loan Classification of the FIs Among the classified loans of the financial sector.29 billion in June 2010 as compared to Nu.000 5. 8.44 Nu.36 2. Of the total loans of Nu.65 10.05 percent of the total loans and advances (Nu.82 555.64 percent.

328. the non-interest income also increased by 12. Similarly. NBFIs and CBs. net interest income was up 39.64 million compared with negative Nu.84 Corporate Deposits – refers to government. 565. joint corporations.33 million).78 (1%) Fixed Nu.7. private companies.39 million.0.12.64 459. government corporations.86 (18%) 9.15 Banks Non-Banks Total FIs 113.16 billion) increase in the interest expense of the financial institutions mainly on corporate deposits. 5 .43 percent. driven mainly by the increase in the return from inter-bank deposits (Nu. Profitability Net profits of the financial institutions for the second quarter of 2010 was Nu. Chart 5: Deposit Type Reccuring Nu. mainly due to the transfer of surplus from the insurance revenue account of insurance companies and also due to the rise in fees and commissions earned by the financial institutions from their respective retail business.967. corporate deposits5 accounted for around 63 percent and the remaining 37 percent constituted retail deposits.51 (32%) Saving Nu.in million 400 300 200 100 0 100 69.80 Nu.573.31 million for the second quarter of 2009.71 percent (Nu. In other words.48.690.31 21.87 percent to Nu.317.038. corporate deposits dominated the deposit holding pattern of the financial institutions. Chart 6: Net Profit 700 600 500 573.94 (49%) Current Nu.46 48. Despite a 28.ANNEX VIII deposits by customer holdings.19.

47 percent.000 7.02 billion.07) 882. which is around 15 percent above the regulatory requirement of 20 percent.000 6.75 billion.12 Jun-09 Excess Liquidity Banks Non-Banks Jun-10 FIs .34 2.46 billion from negative Nu.404.07 billion to Nu. mainly from their retail banking business (loans and overdrafts by Nu. Liquidity Although the amount of the Government Treasury Bills which replaced the RMA bills doubled.0. the non-banks also experienced an increase in their excess liquidity from negative Nu. in million 2. Meanwhile. The overall excess liquidity with the commercial banks stood at Nu.04 percent growth over that of the same period of previous year.73 billion to Nu.0. As a result.000 2. the non-banks’ SLR position stood 20. it did not have much effect on the excess liquidity of the financial sector.000 5.11 billion.87 billion. reflecting the persistent sluggish trend in investment avenues.000 3.000 1.0.7.76 Nu.000) 7.0.70 5.41 (73. 10. while the non-banks’ net profit increased from Nu. Chart 7: Liquidity 9.750.33 billion).92 percent above the minimum prudential requirement of 10 percent.000 (1. the statutory liquidity requirement (SLR) of the banks stood at a very comfortable position at 35.0. The excess liquidity of the financial sector remained substantial at Nu.000 4. Similarly.88 billion during the period.6.0.0.433.506.000 8.ANNEX VIII The net profit of banks have risen to Nu. registering 107.

73 124.409.20 175.621.00 627.846.171. 2010 (Amount in Nu.703.063.382.626.254.253.18 77.359.291.895.52 44.42 50.551.207.670.59 110. 2009 162.406.515.55 75.99 17.022.814.ANNEX IX ROYAL MONETARY AUTHORITY OF BHUTAN BALANCE SHEET ASSETS FOREIGN ASSETS Cash in Hand Balances with Banks (India) Balances with Banks (Abroad) Term Deposits (Abroad) Long Term Investment Securities (Abroad) Non-Monetary Gold and Silver Accrued Interest on Foreign Investments Total Foreign Assets DOMESTIC ASSETS Cash in Hand Balances with Banks Other Financial Assets Accrued Interest Total Domestic Assets NON FINANCIAL ASSETS Gross Fixed Assets Inventories Other Assets Total Non Financial Assets TOTAL AS AT JUNE 30.743.72 .876.127.49 37.46 5.109.634.69 189.33 351.98 503.204.756.469.88 503.110.52 18.32 7.186.35 94.44 32.766.06 194.142.979.41 984.750.01 7.249.693.177.117.947.870.291.533.87 38.599.119.493.777.98 6.007.064.724.262.77 645.72 856.27 317.307.705.323.036.) AS AT JUNE 30.777.752.003.591.27 1.820.106.984.69 110.90 35.977.08 35.282.278.701.72 62.187.159.434.352.310.09 51.389.811.15 35.597.41 2.666.

406.216.321.370.787.608.660.000.220.162.74 3.50 3.701.39 3.000.83 2.275.170.000.651.35 35.747.887.883.64 57.28 1.254.000.22 300.73 758.984.222.00 14.00 2.078.00 8.002.876.795.844.741.408.38 183.039.37 3.852.38 1.867.794.603.931.781.023.11 21.000.338.00 659.400.939.43 3.02 38.170.216.906.611.20 4.00 0 21.323.000.83 23.000.00 2.683.702.079.735.302.07 394.000.370.00 9.000.724.38 917.48 4.751.952.532.00 452.69 4.000.335.237.43 104.159.778.450.000.608.669.521.632.400.000.888.000.99 1.325.92 2.467.910.74 3.933.545.686.675.124.786.809.00 70.516.531.000.500.000.890.ANNEX IX ROYAL MONETARY AUTHORITY OF BHUTAN BALANCE SHEET (Amount in Nu.00 8.000.249.73 217.777.771.00 595.55 430. 2009 LIABILITIES AND CAPITAL CAPITAL AND RESERVES Capital General Reserve Revaluation Reserves Special Reserves (Return on Deposit of Kuwait Central Bank) Profit and Loss Account Capital Reserves Total Capital and Reserves FOREIGN LIABILITES Due to Banks Due to Government Due to International Institutions Overdraft Accounts GOI Standby Credit Facility Total Foreign Liabilities DOMESTIC LIABILITIES Currency in Circulation Due to Banks Due to Government Due to Other Financial Institutions RMA Bills Interest Accrued Accumulated Depreciation Other Liabilities Total Domestic Liabilities TOTAL AS AT JUNE 30.77 2.170.64 5.675.276.) AS AT JUNE 30.000.920.16 192.069.820.249.381.27 3.72 .323.00 22.942.82 26. 2010 800.617.810.492.285.274.171.

058.946.00 192.045.25 642.739.00 1.139.024.36 189.63 4.249.723.799.333. 2009 PARTICULARS INCOME Interest on Foreign Investment Interest on Rupee Investment Interest on Staff Loans Interest Received on Domestic Investment Royalty from Commemorative Coins Gain or Loss on Sale of Foreign Currencies Commission and Fees Received Income from Other Sources Other Income Total Operating Income EXPENSES Interest Expenses on Foreign Borrowings Interest Expenses on Rupee Borrowings RMA Discount Securities Commission and Fees Paid.146.780.332.31 39.126.999.948.29 7.431.ANNEX IX ROYAL MONETARY AUTHORITY OF BHUTAN INCOME & EXPENDITURE ACCOUNT (Amount in Nu.22 595.191.677.77 718.070.700.272.00 533.00 14 723 016 55 14.18 41.60 10.439.290.648.00 4.313.87 54.70 10.187.460.151.751.609.12 54.55 5.768.00 1.30 871.301.421.160.220.346.322.723.20 777.438.731.40 27.53 100.229.323.249.563. Foreign Banks Commission and Fees Paid.603.781.13 416.524.52 505.772.48 46.000.112.00 295.248.110.307.012.284.753.847.90 1.25 4.023.76 4.66 (53.171.64 (33. Domestic Banks Other Deposit Security Printing and Minting Salaries and Wages Allowances Other Staff Cost Staff Superannuation Fund Directors' Fees and Expenses Auditors' Fees and Expenses Rent and Insurance Electricity.201.394.34 1.33 890.962.30 2.574.206.509.955.317.190.86 67.00 1.38 90.633.01 3.33 39.991.41 384.14 901.463. 2010 614.799.021.185.339.00 357.806.00 3.338.777.245.710.22 24.500.00 2.852.256.899.953.000.00 14 272 843 29 14.063.016.69 8.675.57 38.39 19.236.04 13.90 16.Fixed Assets Total Operating Expenses SURPLUS / (DEFICIT) LESS: Transferred to Special Reserves (Net Earnings on Deposit of Kuwait Central Bank) Prior Period Adjustment Surplus Payable to Government AS AT JUNE 30.086.00 8.79 3.865.648.850.488.00 654.68 2.00 205.609.01 10.000.323.263.28 302.771.879.97) (3.843.000.326.325.659.) AS AT JUNE 30.011.00 1.00 280. Water and Other Charges Postage and Telecommunications Remittances of Notes and Coins Stationery and Supplies Publications Agency and Contractual Services Miscellaneous Expenses Depreciation Repairs and Maintenance Write-Off .077.36 828.831.00) 452.488.246.00 5.281.16) 0.699.316.18 37.72 226.962.38 104.881.529.96 483.566.70 6.571.577.69 .096.031.318.76 40.762.00 330.60 3.913.39 674.

“Bhutan’s External Debt: A Status Report” renamed “Bhutan’s Foreign Aid: A Status Report” from the 2006/07 issue of the report [2001/02-2009/10] 8. “Development in Petroleum Imports and Prices in Bhutan” renamed “Summary of Petroleum Imports and Prices in Bhutan” from the 2006/07 issue of the report [2005/06-2009/10] 13. December 22 2004” [2003/04] 10. IMF Executive Board Concludes Article IV Consultation with Bhutan. Public Information Notice (PIN) [2006/07.ARTICLES PUBLISHED BY THE RMA This list is designed to inform readers about articles/special studies featured by the Royal Monetary Authority in its various regular publications – the Annual Report. “Macroeconomic Projections” [2004/05] 12. “Tourism” [2001/02-2009/10] 5. the quarterly Selected Economic Indicators and the Monthly Statistical Bulletin. “Interest Rates” [2001/02-2009/10] 7. since they first appeared. Restructuring. “Developments in Bhutanese Financial Institutions” [2001/02-2009/10] 4. “The Power Sector in Bhutan” [2001/02-2009/10] 6. Annual Report Most of the articles listed below have been updated and featured in each subsequent annual report. From 2008/09. 1. Misra.P. “Chronology of Important Financial Sector Developments” [2001/02– 2009/10] 3. “Address at the Royal Monetary Authority by International Monetary Fund Executive Director B.” 2. this was merged with the new Section on “Governance and Organizational Development. and Important Projects” [2001/02-2009/10]. “The Royal Monetary Authority of Bhutan: Functions. 2008/09] . “Review of Performance of Bhutan’s Financial Sector” [2002/03-2009/10] 9. “Housing Credit (Summary)” [2004/05] 11.

“9th Five-Year Plan Outlay” [September 2002] 5. 1. “Revised Estimates of Government Budget 2001/02” [August 2002] 4. “Restructuring of the Royal Monetary Authority of Bhutan” [June 2004] . “Profile on Bhutan’s Public Limited Companies” [March 2003] 11. “Summary of the National Budget 2002/2003” [June 2003] 6. “Bhutan Beverages Company Limited (BBCL)” [December 2002] 8. “Highlights of the National Budget 2004/05” [June 2004] 8. “Bhutan Balance of Payments: Methodology. Compilation Practices. “A Leap Into Modernization – The FDI Policy” [January 2003] 9. “Revision of the Consumer Price Index” [December 2002] 3. “Bhutan Beverages Company Limited (BBCL)” [December 2002] 4. “Restructuring of the Royal Monetary Authority of Bhutan” [June 2004] Monthly Statistical Bulletin 1. “Forestry and Logging in Bhutan” [June 2003] 13. “Druk Air Corporation Limited: An Overview” [September 2003] 7. and Data Sources” [December 2002] 2.Selected Economic Indicators Articles were featured from December 2002 onwards. “Performance of Financial Institutions During 2001” [June 2002] 2. “Revision of the Consumer Price Index” [November 2002] 7. “Real Effective Exchange Rate of the Ngultrum” [May 2003] 12. “Tourism” [February 2003] 10. “Druk Air Corporation Limited: An Overview” [July 2003] 14. “Development of Imports from Thailand” [March 2003] 5. “Price Developments” [July 2002] 3. “External Debt” [October 2002] 6.

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