Bhutan's trade deficit more than trebled during 2009/10 on the back of surging imports and only modest growth in exports (as hydroelectricity exports were constrained by an increase in domestic demand for hydropower). The trade deficit is expected to narrow in 2011 and 2012, as export growth accelerates on the back of strong economic growth in Bhutan's export markets, most notably in India. Grant inflows associated with the construction of new hydropower projects are also expected to remain strong in the forecast period. These two factors should help to lead to a narrowing of the current-account deficit. Inflows of development aid (in the form of loans), which have traditionally provided another pillar of support to the balance of payments, are expected to diminish as donor nations prioritise other countries that are seen as having a greater need for such funds, including nations that are beset by natural disasters and those that are facing acute civil unrest, and this will lead to a narrowing of the capital account surplus. The government estimates that Bhutan's external debt will have grown by 22% year on year in 2010/11, and we expect it to continue to rise throughout 2011-12. Loans for hydropower projects will account for most of that rise.