Agriculture and dairy farming are the most important economic activities in the district. Chamkhar town is the principal service center (see Fig. 2) with large number of shops selling essential provisions, while Jakar (see Fig. 3) to the west of Chamkhar, serves as the administrative centre. The establishment of several other activities such as repair workshops, sawmills, and tourist resorts, also indicates that the economic base of the town is slowly diversifying. Bumthang is famous for its cheese, butter, honey, woven woolen clothes, and wood stoves. As Bumthang is one of the most sacred places in Bhutan, it is also a major tourist destination and a haven for local pilgrimage.

The Urban Development Project Preparation Study conducted in 1999 estimated the total population for Bumthang Town at 2,560 for the year 2000 with an estimated annual increase of 5% until the year 2005 and an increase of 3.1% thereafter. This estimates the total population of the town to be approximately 5,000 by the year 2020. This rapid growth is consistent with the good urban development potential of Bumthang and the evident signs that its economic base is diversifying.