Bhutan is a founding member of the SASEC Program, joining with Bangladesh, India, and Nepal in 2001 to form this project-based partnership. Maldives and Sri Lanka became full members of SASEC in May 2014, following several years as active observers.

Bhutan's Twelfth Five Year Plan for 2018–2023 envisions a just, harmonious, and sustainable society through enhanced decentralization. The plan highlights priorities to reduce poverty and inequality and ensure renewable energy supply. The plan also intends to enhance cooperation with other countries and strengthen engagement in international and regional frameworks.

SASEC Projects in Bhutan

Since 2003, the Government of Bhutan has signed 10 ADB-financed SASEC investment projects worth more than $680.29 million.

Bhutan: SASEC Projects
Source: SASEC Project Portfolio, as of March 2023

Source: SASEC Project Portfolio, as of March 2023

In addition to projects, ADB-financed technical assistance has supported SASEC investment projects in Bhutan, regional cooperation forums and knowledge-sharing initiatives, and pilot projects since 2001. A total of 18 national technical assistance projects (cumulative worth over $20.74 million) have assisted Bhutan in project preparation, strategic planning, and capacity building.

Trade Snapshot

Direction of Intra-regional Trade

The value of Bhutan's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2022, is captured in the tables below.

Bhutan's top import source worldwide is India, with imported goods valued at over $2.2 billion. Nepal, ranking 8th worldwide, exported goods to Bhutan worth $16 million while Bangladesh, ranking 12th, exported goods to Bhutan valued at $5 million.

Bhutan's top export destination is India, with exported goods from Bhutan valued at $34 million. Bangladesh ranks 3rd with exported goods from Bhutan valued at $2 million. Nepal ranks 4th, with exported goods from Bhutan valued at $2 million.

Bhutan Trade - Import

Source: IMF Direction of Trade Statistics, accessed May 2022

Bhutan Trade - Export

Source: IMF Direction of Trade Statistics, accessed May 2022

Logistics Performance Index (LPI)

Bhutan registered an overall LPI score of 2.17 in 2018, below the South Asia regional average score of 2.51. Bhutan registered improved scores in logistics competence and tracking and tracing (both at 2.35), resulting in an overall 2018 rank of 149 out of 168 economies. The country's best score is in timeliness at 2.49.

Bhutan LPI 2018

Source: World Bank LPI (accessed December 2018)

Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.

Economic Outlook

Asian Development Outlook

Bhutan's gross domestic product is forecast to grow at 4.5% in fiscal year (FY) 2022 and 4.0% in FY2023, with agriculture and construction projected as key drivers of growth. Growth in services will be lower than projected and this could dampen FY2023 growth and will affect businesses that depend on tourism.

Source: Asian Development Outlook 2022 Supplement (ADB)
South Asia Economic Focus

Bhutan's real GDP is projected at 4.1% in FY2022-2023. Economic recovery is attributed to the country's high rate of vaccination and the restoration of mobility. The reopening of Bhutan's borders in September 2022 has allowed for the recovery of the tourism sector. High inflation and a lower than projected investments in hydropower will however temper development. Lower poverty rates are projected for 2022 and 2023.

Source: South Asia Economic Focus, Fall 2022 (WB)