Bhutan stops importing inflation!

New statistics has shown Bhutan’s inflation is becoming homegrown. If the trend continues, the country’s inflation culture is likely to break the traditional association with that of India.

The National Statistical Bureau’s Consumer Price Index CPI revealed that the average price of goods and services between November 2014 and November 2015 had risen by 3.59 per cent. However, the prices of imported goods rose by 2.69 per cent and the volume of imported goods increased by 4.60 per cent. This means that more than 60 per cent of the inflation is home-grown.

In October, the average price of domestic goods and services increased by 4.74 per cent, while that of imported goods rose by 2.51 per cent. However, imported goods have more weights to influence the inflation.

The NSB bases the CPI on December 2012 prices and tracks the price movements of 151 items (436 varieties) in 20 districts and two major urban areas every month. Every item is attached with weights.

The CPI increased because the price of food rose by 3.19 per cent and that of non-food items by 5.42 per cent.

In contrast, prices of imported food commodities rose by 2.26 per cent and non-food prices by 3.04 per cent.

Drop in the rate of imported inflation could be attributed to the global drop of crude-oil prices. Fuel and lubricants recorded a price decrease of almost 4 per cent between November 2014 and November 2015. Price of fruit also dropped by 4 per cent.

At home, however, the cost of catering services rose by almost 10 per cent in a year; housing, electricity and water also recorded a rise of 4.4 per cent, while education became dearer by about 7 per cent.