Bhutanese economy is characterized by its small size given its small population size. With the majority of the Bhutanese people illiterate and residing in rural areas, about 31% of the population still lives under poverty line. However, in general all Bhutanese have a shelter and are self – sufficient to a large extent. With rapid modernization the living standard of the people has also stared to grow in the recent years and every village have now access to basic amenities such as Schools, Basic Health Units, feeder roads and electricity. Plans are also underway to connect even the remotest villages with a good net work of telecommunication and mobile phones.

Bhutanese economy is dominantly agrarian. With a bulk of the population being farmers, agriculture is the main stay of their sustenance followed by a large extent with animal husbandry. Animal products such as cheese, butter and milk not only form a major diet for the farmers but also contribute to their income. With many farmers groups and cooperatives being encouraged by the Ministry of Agriculture and Forest, people have been encouraged to set up cooperative stalls where they can easily market their farm products.
The main crops are rice, maize, wheat and buckwheat while cash crops are predominantly potatoes, apples, and citrus such as oranges, cardamom, ginger, and chili. With the setting up of a fruit based industry in the capital, farmers from the nearby areas are able to market their fruit products and thereby earn additional revenue.

Given the rich bio-diversity, Bhutanese have also been able to tap the forestry resources. Cane and bamboo works therefore form a source of income. Various cane and bamboo products now find their way into the market that is usually bought by the urban dwellers and the tourists.

In the recent years, however, a major contributing factor to the Bhutanese economy has been the tourism industry. Since its opening in 1975, the country has made significant expansion in tourism industry. It not only generates the much needed revenue for Bhutan, but to an extent has been able to create employment for most Bhutanese graduates and the educated lot.

But undeniably, the power sector has been the biggest contributor to the Bhutanese exchequer. The Chhukha Hydro Power Corporation, the Tala Hydro Power Corporation, the Baso Chu Hydro Power Corporation and the Kurichu Hydro Power Corporation under the umbrella of Druk Green Power Corporation are some of the mega projects that churn out about 1500 MW of power, most of which are exported to our neighboring country India. With abundant water resources, Bhutan still has the capacity to generate about 30,000 MW of electricity.

Another sector that contributes to the revenue is the contribution from the manufacturing sector. With the industrial sector established in Pasakha, some of the small scale industries that have cropped up are cement plants, calcium and carbide, steel and Ferro silicon, coca cola and also wood based industries.

As a result of the economic development, with US $ 1,321, today we have one of the highest per capita incomes in South Asia.