August 20, 2024
THIMPHU – The costs of goods and services eased to 1.84 percent in June this year compared to the same month last year, according to the National Statistics Bureau (NSB).
This was 1.99 percentage points down from the inflation rate of 3.83 percent in June last year.
This was primarily driven by decrease in prices of communication, housing and utilities, recreation, transport, and education, the NSB stated.
An increase in the prices of goods and services has eroded the purchasing power of ngultrum by 1.81 percent. The purchasing power of ngultrum at Nu 100 in June this year has the same value of Nu 57.4 at December 2012 prices.
Inflation measured by the consumer price index (CPI) measures the prices of consumer goods and services change over time on average. It helps to measure inflation, indicating if prices have decreased or increased from a specific reference period, called the base year.
In the first six months of this year (January to June), the CPI was recorded at 3.78 percent.
According to the NSB’s press release, the food inflation moderated to 2.39 percent in June this year from 4.72 percent in June last year.
Under food, food and non-alcoholic beverages were the main drivers, down by 2.74 percentage points from 4.85 percent in June last year while non-food inflation eased to 2.06 percent from 3.08 percent during the same period.
This was because of communication prices dropping to -2.7 percent and housing and utilities to -0.5 percent. The cost of recreation and culture stood at 0.16 percent, education at 0.68 percent, transport at 1.05 percent, and furnishing and household equipment at 1.91 percent.
Comparing the annual average headline inflation, the inflation eased to 4.23 percent in 2023 compared to 5.64 percent in 2022. This was mainly because of a slower annual increase in non-food items at 4.44 percent compared to 7.1 percent in 2022.
The NSB also released a newly rebased CPI report for June with four additional CPI rates-Thimphu (capital) western, central, and eastern region.
For Thimphu, the month-on-month inflation dropped to 0.09 percent in June because of the decrease in non-food prices from May this year mainly because of decrease in non-food prices.
Housing and utilities index saw a decrease to 1.01 percent, and transport to 0.03 percent. However, the food and non-alcoholic beverages saw a marginal increase of 0.01 percent.
For the central region that includes Bumthang, Dagana, Sarpang, Zhemgang, Trongsa, Tsirang, the inflation dropped to 0.63 percent. This according to NSB indicates a moderation in cost of living.
The non-food price index decreased to 0.47 percent, driven by drop in fuel and utility prices in the transport and housing and utilities categories with 2.58 percent and 1.72 percent respectively. The food index also saw a marginal decrease of 0.17 percent.
Inflation was recorded at 0.28 percent in the western region, which includes Gasa, Punakha, Thimphu, Wangdue, Haa, Paro, Samtse, and Chhukha Dzongkhags.
This was largely contributed by a drop in transport by -3.42 percent, housing and utilities by -1.07 percent. However, food and non-alcoholic beverages increased to 0.49 percent.
The inflation was recorded at 0.01 percent in the eastern regions of Mongar, Tashigang, Trashigyangtse, Lhuntse, Pemagatshel, and Samdrupjongkhar.
Food prices increased to 0.45 percent while non-food prices dropped to 0.45 percent. Transport and housing and utilities recorded -3.10 percent and -1.21 percent drop respectively.
The overall decrease in inflation was mainly due to decline in transportation and housing and utility prices, driven largely by lower fuel prices.
To compute inflation, 169 items were taken at national level, 120 items in eastern, 165 items in western, 144 items in central, and 134 items in capital Thimphu.