…𝒇𝒐𝒐𝒅 𝒑𝒓𝒊𝒄𝒆𝒔 𝒑𝒓𝒐𝒑𝒆𝒍 𝒕𝒉𝒆 𝒐𝒗𝒆𝒓𝒂𝒍𝒍 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆, 𝒘𝒉𝒊𝒍𝒆 𝒄𝒆𝒓𝒕𝒂𝒊𝒏 𝒔𝒆𝒄𝒕𝒐𝒓𝒔 𝒃𝒖𝒄𝒌 𝒕𝒉𝒆 𝒕𝒓𝒆𝒏𝒅, 𝒂𝒏𝒅 𝒕𝒉𝒆 𝒑𝒖𝒓𝒄𝒉𝒂𝒔𝒊𝒏𝒈 𝒑𝒐𝒘𝒆𝒓 𝒉𝒂𝒔 𝒅𝒆𝒄𝒓𝒆𝒂𝒔𝒆𝒅 𝒃𝒚 4.75 𝒑𝒆𝒓𝒄𝒆𝒏𝒕 𝒅𝒖𝒆 𝒕𝒐 𝒑𝒓𝒊𝒄𝒆 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆𝒔 𝒊𝒏 𝒕𝒉𝒆 𝒆𝒄𝒐𝒏𝒐𝒎𝒚
By Susmika Subba
In December 2023, Bhutan’s Consumer Price Index (CPI) reported a noteworthy year-on-year increase of 4.99 percent, indicative of a measured uptick in the cost of living from the preceding year. This statistical revelation, emanating from the National Statistical Bureau, illuminates the specific sectors instrumental in propelling the overall surge.
The 4.99 percent spike in the overall CPI was predominantly fueled by a substantial 6.21 percent surge in the food index. Concurrently, non-food items experienced a rise, albeit at a more modest rate of 3.96 percent. Noteworthy exceptions to this trend were observed in the transport and communication sectors, which saw a decline of 1.34 percent and 2.86 percent, respectively.
A closer examination of the food index uncovers a 6.22 percent increase in the prices of food and non-alcoholic beverages, while alcoholic beverages and betel nuts recorded a 5.99 percent uptick. On a monthly basis, the CPI in December 2023 witnessed a 0.41 percent rise from November. This included a 1.5 percent increase in the food index and a 0.5 percent decrease in the non-food index.
Zooming out to scrutinize the broader economic landscape, household goods and services experienced a 4.23 percent increase from 2022 to 2023. Despite a decrease of 1.41 percentage points compared to the preceding year, non-food items still underwent a 4.44 percent increase, showing a moderation from the 7.10 percent surge in 2021.
Within the twelve major groups, health marked the highest increase at 12.47 percent, while transport exhibited the lowest increase at 0.85 percent. The communication index experienced a notable decrease of 1.06 percent. Indices for food and non-alcoholic beverages, housing and utilities, health, recreation and culture, education, and restaurants and hotels all displayed discernible increases, collectively contributing to the overall CPI rise.
Examining the purchasing power of Ngultrum through the lens of CPI, the measure stands at Nu. 56.4 as of December 2023 compared to December 2012. This implies that Nu. 100 in December 2023 is equivalent to Nu. 56.4 at December 2012 prices. Over the last year, from December 2022 to December 2023, the purchasing power has witnessed a 4.75 percent decline due to economic price escalations.
The CPI trends and purchasing power analysis proffer insightful perspectives into country’s economic dynamics. While certain sectors bask in significant increases, others navigate a decline, emblematic of the intricate interplay of factors shaping the nation’s economic terrain.
The food lab technology was procured with 80% of the funding provided by the Austrian Development Agency (ADA) and a 20% equity contribution from HAB. The significant funding support from ADA underscores the commitment to fostering global partnerships and contributing to the socio-economic development of Bhutan. The collaboration aims to empower local cooperatives and enhance their capabilities in food processing and quality control.
The food lab equipment handed over to KNC includes a sterilizer, homogenizer, pasteurizer, grinder, vacuum packaging machine, refractometer, pH-meter, salinity meter, acidity titration kit, measuring cylinders, beakers, spatula, thermometer, homogenizer lab scale, freeze dryer, and other accessories. This initiative marks a transformative step towards sustainable agriculture and economic development in Zhemgang.