While global food prices are going up, a similar spike is seen in the prices of food and other essential items happening here in the country too.
In 2020, the average inflation rate in Bhutan was about 4.15% compared to 2.82% of 2019. However, the average inflation rate in 2021 is as high as 6.27%. While a formal inflation target may not have been established, policymakers generally believe that an acceptable inflation rate is around 2% or a bit below.
If we go with the prices of the regular purchases that we make, the price of the 4.5-liter soya bean oil jar, which was available earlier at Nu 450, is priced at Nu 680 today. A carton of Amul Taaza Milk today costs Nu 820 from Nu 680 earlier.
It is just not edible oil and milk, whose prices have soared in the markets. There has been a spike in food prices and the costs of food, groceries and household supplies, which have increased since the Covid-19, are only going up.
Local vegetable prices have also been on the rise. Some residents, as a result, have no option than to buy what they can. Even affording basic necessities seems like a grueling struggle for many. This is especially true for families in the poor and the middle income group.
Further, we have seen drastic increases in the prices of petrol and diesel last month. In Thimphu, the price of petrol and diesel increased by more than Nu 10 and Nu 17 respectively, whereas a liter of petrol today costs Nu 95.19 and diesel Nu 100.55.
While the soaring food prices may not be much of a problem for the affluent section of the society, it has become a challenge for especially those whose lives and livelihood have been affected by the Covid-19 pandemic.
Fortunately, the Druk Gyalpo’s Relief Kidu in the form of income support has come as a rescue for many from hunger and starvation.
An undeniable fact for now is many of our urban residents don’t live and have the choices they had before the pandemic. They are more mindful of what they are spending on and why they are doing so. The economic hardship has adversely affected their everyday life.
The government on the other hand expresses its helplessness when it comes to regulating prices in the market; often citing that the prices in the market are self-determining and would be determined by the so-called demand and supply mechanism.
However, it becomes pivotal too for the government to intervene when prices have soared so much that it starts hitting the most vulnerable populations of the country. At least the government can ensure that there is no price manipulation of goods or exorbitant charging in the markets.