The Consumer Price Index (CPI) in the country recorded a 3.12% inflation rate in January, according to the most recent findings by the National Statistics Bureau (NSB). This increase was primarily driven by rising food and non-food indices, with the Eastern region experiencing a 1.50% month-on-month headline inflation rate and the Western region at 1.11%.
Similarly, year-on-year inflation for food increased to 4.81% in January 2025. Within the food category, the food and non-alcoholic beverages index recorded an increase of 5.30%, while the alcoholic beverages and betel nuts index saw a drop of -1.1%.
In contrast, non-food inflation rose to 1.20% in January 2025. This upward trend in the non-food category was mainly driven by a 6.28% increase in the clothing and footwear index. Other categories such as communication (6.65%), recreation and culture (4.48%), and furnishings, household equipment, and routine household maintenance (3.67%) also saw increases. Meanwhile, the transport index dropped by -3.15%, and the housing and utilities index fell by -0.58%.
Eastern and Western Region Inflation
Inflation rates soared in both the eastern and western regions of the country, with noticeable increases recorded.
According to the NSB, the Eastern region’s month-on-month headline inflation rate surged to 1.50% in January 2025, primarily driven by increases in both the food and non-food indices. The food inflation rate in the Eastern region also saw a notable increase, rising to 1.46%, with the food and non-alcoholic beverages index increasing by 1.35%, and the alcoholic beverages and betel nuts index rising by 2.90%.
Similarly, non-food inflation in the Eastern region increased to 1.55%. This was mainly driven by a 3.59% increase in the clothing and footwear index, a 2.46% increase in the miscellaneous goods and services index, a 1.88% increase in the housing and utilities index, and a 1.26% increase in the transport index. However, the communication index saw a drop of -0.07%.
The Western region’s month-on-month headline inflation rate increased to 1.11%, fueled by increases in both the food and non-food indices. The food inflation rate in the Western region recorded an increase of 0.23%. This increase was primarily attributed to a 0.67% rise in the food and non-alcoholic beverages index and a 1.49% increase in the alcoholic beverages and betel nuts index.
Non-food inflation in the Western region increased by 1.51% in January, driven by a 4.25% increase in the recreation and culture index, a 3.59% rise in the miscellaneous goods and services index, a 3.53% increase in the restaurant and hotels index, and a 3.10% increase in the clothing and footwear index. The transport index also saw an increase of 1.17%.
Capital City and Central Region Inflation
Similarly, inflation rates rose significantly in both the Capital City and the Central region in January 2025.
According to the NSB, the month-on-month inflation in the Capital City increased to 1.54%, while the Central region experienced a substantial 0.79% increase in inflation.
For instance, food inflation in the Capital City increased by 0.17%. Within the food category, the index for food and non-alcoholic beverages rose by 0.18%, while the alcoholic beverages and betel nuts index remained unchanged.
The non-food index in the Capital City increased by 2.8%, mainly driven by an 11.95% rise in the recreation and culture index, an 8.18% increase in the clothing and footwear index, and a 7.40% increase in the miscellaneous goods and services index. The communication index saw a drop of -0.15%.
Similarly, food inflation for the central CPI increased by 0.37%, largely driven by a 0.40% rise in the food and non-alcoholic beverages index and a 0.83% increase in the alcoholic beverages and betel nuts index. The non-food inflation in the Central region also increased by 1.13%, primarily driven by a 4.55% rise in the clothing and footwear index and a 3.24% increase in the transport index. The communication index saw a slight drop of -0.19%.
Meanwhile, an economic expert noted that the sharp increase in inflation rates in the Capital City and Central region raises concerns about the overall economic performance. “With prices rising across major categories, consumers can expect higher costs for essential goods and services. This, in turn, may impact purchasing power and overall economic growth,” said the expert.
Additionally, the expert suggested that as inflation increases, policymakers must take a closer look at monetary and fiscal policies to mitigate the impact of rising prices and ensure stability in the economy.
Sherab Dorji From Thimphu
