Economy Guide in Bhutan

Costs are very affordable with a Cost of Living Index of 22.9. Groceries (22.2) and restaurant prices (14.8) are significantly lower than the NYC baseline.

The property price to income ratio is 12.7 years, indicating an expensive housing market. However, the rent index is very low at 2.2, suggesting more affordable rental options.

The purchasing power index of 80.4 suggests a moderate level of buying power for residents.

Bhutan has a progressive income tax system with rates from 0% to 30% (effective 2026), including a 15% standard deduction. A Goods and Services Tax (GST) of 5% was implemented on January 1, 2026, replacing the previous sales tax. Property taxes are standardized nationwide.

Bhutan was ranked 89th in the World Bank's 2020 Ease of Doing Business report. The government actively supports a growing startup ecosystem through various initiatives, and efforts are ongoing to simplify business regulations and attract foreign investment.

Bhutan provides universal free healthcare for its citizens, though expats are advised to secure private international insurance due to limited advanced facilities. The social safety net is considered fragile, with only 8% of workers covered by pension schemes and 92% lacking social insurance.

Bhutan's banking sector is considered stable and resilient, with strong regulatory oversight by the Royal Monetary Authority. However, no explicit statutory deposit insurance scheme with a defined coverage limit was found in recent information.