February 6, 2025
THIMPHU – Bhutanese consumers experienced a 2.82 percent increase in the prices of goods and services in 2024 compared to the previous year, according to the National Statistics Bureau’s (NSB) latest Consumer Price Index report.
This rise in inflation means households are now spending 2.82 percent more on the same basket of goods and services as they did a year ago.
Over the past five years, inflation reached its lowest point last year, which is down by 1.41 percentage points with prices rising by 4.23 percent in 2023.
This is a significant decline from the pandemic-driven peak of 5.63 percent in 2020, which further soared to 7.35 percent in 2022 before cooling down in the following year.
The NSB attributed the drop in inflation to slower annual increases in both food and non-food prices.
Food inflation decelerated to 0.48 percent last year, a sharp decline from 3.97 percent in 2023. The reduction in the food and non-alcoholic beverages index, which eased to 0.49 percent, played a key role, along with a drop in the alcoholic beverages and betel nuts index to 0.24 percent.
Non-food inflation slowed to 0.25 percent from 4.44 percent in 2023, mainly due to reductions in the communication and transport indices, which fell to -0.64 percent and -0.14 percent, respectively.
Several other sectors also saw a significant decline in prices. The price of clothing and footwear dropped from 6.9 percent to 0.47 percent, housing and utilities from 8.21 percent to 0.76 percent, health from 12.47 percent to 0.64 percent, education from 3.82 percent from 0.2 percent, and restaurant and hotels from 4.59 percent to 0.24 percent, among others.
The purchasing power of the ngultrum continues to erode, with Nu 100 in December 2024 worth only Nu 55.3 compared to December 2012. The purchasing power declined by 1.98 percent last year alone, driven by rising prices.
The month-to-month inflation rose to 2.02 percent in December last year from the previous month’s 1.87 percent in November.
Food inflation spiked to 4.47 percent, with the food and non-alcoholic beverages index rising by 5.05 percent. However, the alcoholic beverages and betel nuts index dropped to -2.42 percent.
Non-food inflation fell to -0.6 percent in December, mainly due to decreases in the housing and utilities index (-0.85 percent) and the transport index (-5.43 percent).
In terms of regional trends, the western region—which includes Thimphu, Gasa, Punakha, Wangdue, Haa, Paro, Samtse, and Chukha—experienced the highest month-to-month inflation in December at 1.34 percent.
The central region, covering Bumthang, Dagana, Sarpang, Zhemgang, Trongsa, and Tsirang, saw inflation rise by 0.52 percent.
The eastern region, comprising Mongar, Trashigang, Trashiyangtse, Lhuentse, Pemagatshel, and Samdrupjongkhar, recorded a 0.41 percent increase.