Bhutan’s annual inflation rate was up by 3.1 percent in the year 2014
Bhutan’s annual inflation for the quarter ending June 2014 was recorded at 8.6 percent, up by 3.1 percentage points, against 5.5 percent in 2013 (year-on-year), according to annual report 20132014 of Royal Monetary Authority of Bhutan.
The report also highlighted that, the rise in prices of food items has mainly contributed to the increase of the consumer price index (CPI) in the quarter ending June 2014.
The significant increase in the prices of food commodities was registered at 12.3 percent in quarter 2 (Q2) in 2014, compared to 2.8 percent during the same quarter last year. However, the prices of non-food items decreased by 6.1 percent during the second quarter of 2014 compared to 7.1 percent last year, the report states.
The report further states that, while the overall monthly CPI (year-on-year) recorded to 8.1 percent increase in June 2014, of which prices of imported goods increased by 7 percent, while domestic goods and services increased by 9.4 percent.
Besides that, the percentage weights to the overall inflation from imported goods accounted for 52.6 percent while domestic goods and services accounted to 47.4 percent for June 2014, the report states.
The report also states that, during June 2014, under food items, which constitute 39.9 percent of the overall weight assigned in the commodity basket, narcotics saw the highest year-on-year increase in prices by 26.7 percent followed by fish 17.4 percent; coffee, tea and cocoa 14.1 percent; wine 13.9 percent; food products n.e.c 13.7 percent; meat 13.7 percent; vegetables 13.2 percent; fruit 12.7 percent; bread and cereals 12 percent; milk, cheese and eggs 11.2 percent; oils and fats 9.6 percent.
Moderate price increases were noted for beer at 6.2 percent; spirits at 3.7 percent; and sugar, jam, honey etc. at 2.4 percent. However, downward price movements in the food group came from a fall in the prices of mineral water, soft drinks and juice products by 0.1 percent, states that report.
According to the annual report, for non-food items, the highest yearon-year increase in prices was recorded for electric- ity, gas and other fuels at 14.3 percent followed by glassware, tableware and utensils at 12.2 percent; furniture and furnishing, carpets and other floor at 11.4 percent; household textiles at 3.9 percent; household rental at 9.53 percent; accommodation services and personal care at 7.2 percent each; and footwear at 3 percent.
Besides that report also shows that, other non-food items noted moderate price increases except for tools and equipments for house and garden; telephone and telefax equipment; recreational and cultural services which recorded negative growth during June 2014.
While the purchasing power of ngultrum (PPN), as measured by CPI, recorded 87 ngultrum as of June 2014. This implies that ngultrum 100 in June 2014 was worth only ngul- trum 87 at December 2012 price, which shows that, the value of ngultrum had depreciated by 13 percent in the past 12 months due to increase of prices in the economy.
As of June 2014, the reports shows that overall producer price index inflation (PPI) had grown up by 3.6 percent compared to June of the previous year, due to the increase in prices mainly contributed by manufacturing sector by 5 percent and mining sector by 2.5 percent and transport sector by 1.2 percent.
Meanwhile, report shows that prices for electricity and water supply recorded a constant increase of 2.9 percent and 4.6 percent respectively in three months (2014). While there was a decrease in information and communication sector due to reduction in the rates of internet leased lines.