Bhutan profile

Demography and Health

Bhutan is a small Himalayan country with a population of 791,524 in 2024 and a modest net outflow of 277 people. The birth rate stands at 12.7 per 1,000 people, while the death rate is 6.11 per 1,000, producing a gradual natural increase. Life expectancy at birth is 73.0 years, and under-5 mortality is 23.1 per 1,000 live births, indicating that while overall longevity has improved, child health remains an area for continued focus. The poverty headcount at the national poverty line sits at 12.4% (2022), showing substantial progress but leaving pockets of vulnerability, especially in rural areas. Bhutan’s health system shows capacity constraints: physicians measure 0.552 per 1,000 people (2022) and hospital beds 2.2 per 1,000 (2021), signaling limited per-capita access to inpatient care and a reliance on primary care networks. Health expenditure is modest, with current health expenditure at 4.39% of GDP (2022) and government health expenditure per capita, PPP at 294 international dollars (2022), suggesting tighter public health financing and potential gaps in service delivery capacity. Suicide mortality is 4.9 per 100,000 (2021), a data point that highlights ongoing mental health considerations in a region where cultural and geographic factors intersect with health services. The population is digitally connected, with 88.4% of people using the Internet in 2023, which supports health information access and telemedicine possibilities. Employment appears tight with unemployment at 3.13% (2023), underscoring a relatively favorable labor market in a small economy. These demographic and health indicators together portray a country with solid health outcomes and strong social indicators but with gaps in health workforce capacity and access that warrant continued investment, especially in rural health infrastructure, preventive care, and mental health services.

Economy

Bhutan’s economy is characterized by a small, hydro-powered, energy-led model with a relatively low nominal GDP per capita of 3,839 US$ in 2023 and a GDP per capita (PPP) of 16,254 international dollars, reflecting substantial productivity advantages when valued at purchasing power parity. The nation benefits from a very high share of renewable energy consumption, at 82.5% of total final energy consumption in 2022, underscoring hydropower's central role and contributions to energy security and potential regional energy exports. Inflation remains moderate at 2.76% in 2024, and unemployment is low at 3.13% (2023), indicating a generally stable domestic labor market. However, the economy faces external vulnerabilities: the current account balance is negative, at -20.5% of GDP in 2024, implying a sizable deficit that likely reflects high import needs and capital outlays for development. Foreign direct investment net inflows are modest at 0.395% of GDP (2023), signaling limited diversification of investment beyond traditional channels. Growth is supported by hydro-related revenues but constrained by a narrow export base, which reinforces the importance of policy measures to broaden the economy, attract investment, and deepen value-added activities beyond hydropower. While energy exports may cushion external sector dynamics, the broader growth prospects depend on improving trade efficiency, expanding private sector opportunities, and raising productivity across sectors.

Trade and Investment

Bhutan’s trade and investment profile is defined by a narrow export base and a sizable import requirement. Exports of goods and services amount to 28.3% of GDP (2023), while imports equal 53.2% of GDP (2023), indicating a structural trade deficit typical of a small, resource-led economy that imports capital goods, consumer goods, and services. Foreign direct investment net inflows are 0.395% of GDP (2023), reflecting limited but existing investor interest, potentially centered on energy, infrastructure, and related services. The Logistics Performance Index score, at 2.2 (2022), and a rank of 24, suggest that Bhutan has a workable but improvable logistics and transport network necessary for moving hydropower and other goods across its mountainous terrain. A current account deficit of -20.5% of GDP (2024) highlights the need for ongoing reforms to boost export competitiveness, diversify the economy, and potentially harness regional infrastructure and trade corridors to reduce vulnerability to external shocks. In essence, Bhutan sits at a crossroads where hydropower exports offer significant upside, but sustained growth will require improving regulatory quality, trade facilitation, and investment climate to attract larger and more diversified capital inflows.

Governance and Institutions

Bhutan’s governance indicators show a mix of strengths and weaknesses. Political stability and absence of violence or terrorism are high, at 0.983 (2023), with a rank of 28, indicating a relatively stable political climate. The rule of law is solid, at 0.668, reflecting credible legal frameworks and enforcement. Government effectiveness stands at 0.566, signaling functional public services and policy execution, while control of corruption is comparatively strong at 1.53, ranking 20, indicating relatively low levels of corruption for a small economy. However, regulatory quality is negative, at -0.401, suggesting weaknesses in designing, coordinating, and updating regulatory frameworks that could impede business environment and private sector dynamism. Taken together, Bhutan enjoys a stable, law-based governance environment with functional institutions, but the regulatory regime presents a priority area for reform to enhance competitiveness, streamline procedures, and attract higher-quality investment. Addressing regulatory bottlenecks could unlock faster public service delivery and more efficient implementation of development strategies.

Infrastructure and Technology

Bhutan’s infrastructure and technology landscape features a high level of digital connectivity, with 88.4% of the population using the Internet in 2023, enabling digital government, e-commerce, and information access across much of the country. Physical health infrastructure remains modest, with 2.2 hospital beds per 1,000 people (2021) and 0.552 physicians per 1,000 people (2022), signaling a constrained health-service capacity that could limit responses to health shocks without further investment in facilities and workforce. The energy system is a clear strength, given the heavy reliance on renewables (82.5% of total final energy consumption in 2022) due to hydropower. The Logistics Performance Index at 2.2 (2022) with a rank of 24 indicates that Bhutan has a serviceable, though imperfect, logistics network that supports cross-border trade and energy exports in a challenging mountainous geography. Overall, Bhutan’s infrastructure and technology profile combines strong digital inclusion and renewable energy leadership with a need to expand physical infrastructure—especially health and transport networks—to sustain inclusive growth and improve service delivery.

Environment and Sustainability

Bhutan’s environmental profile reflects a dual reality of high renewable energy use and water resource pressure. Renewable energy consumption accounts for 82.5% of total final energy consumption in 2022, highlighting hydropower as a cornerstone for low-carbon development and potential regional electricity exports. Yet the level of water stress, measured as freshwater withdrawal relative to available freshwater resources, is 1.41 (2021), suggesting substantial dependence on water resources that may stress seasonal flows and require careful water management and hydropower planning. Per-capita greenhouse gas emissions are 4.14 t CO2e (2023) excluding LULUCF, indicating a modest carbon footprint typical of a hydro-dominated economy with limited heavy industry. Bhutan’s environmental trajectory reflects strong opportunities for clean energy leadership and climate resilience, while also presenting challenges in sustainable water governance, ecosystem protection, and climate adaptation—areas that will require integrated management as energy exports grow and regional demand evolves.