The Indian economy’s foreign exchange reserves increased by 15.39% YoY to USD 700.51 million in December 2024, covering 18.12 months of essential imports. The finance ministry predicts the reserves will reach USD 783 million by June 2025, with further growth expected in 2026 and 2027. Bhutan’s Finance Minister, Lekey Dorji, announced that the country expects to receive Nu 16.52 billion in total external grants for fiscal year 2024-25. The country received Nu 6.98 billion in grants in 2023-24, down from Nu 10.62 billion. The government plans to raise Nu 5.79 billion through budgetary borrowings. In addition, Bhutan’s current account deficit results from its continued reliance on imports for capital goods and necessities, while exports are restricted to hydropower. While exports to India receive INR and USD from other nations, imports from India must be paid for in INR and USD for other nations.
The finance ministry predicted that the current account deficit would increase by 3% to Nu 60 billion as of September 2024, from Nu 58.13 billion the year before. The trade deficit has gotten worse as a result of increased imports of goods and electricity. It is anticipated that imports will increase by 5.8% to Nu 106.23 billion by the end of June this year. The main causes of this increase will be increased imports of raw materials for manufacturing and construction, including increased fuel demand. Non-hydro exports are predicted to rise by 12.5% to Nu 41.5 billion due to mining, quarrying, and manufacturing industries’ expansion, while hydropower export revenues are predicted to fall.