The prices of goods and services consumed by households were 3.4% higher in May compared to the same month last year
The price of consumer goods and services saw a rise in the market, with the inflation rate hitting 3.4% in May this year compared to the same month last year, according to the monthly Consumer Price Index (CPI) report released by the National Statics Bureau (NSB).
This means that the prices of goods and services consumed by households were 3.4% higher in May compared to the same month of the previous year.
The report also revealed that the price of both food and non-food items saw price hikes, with food prices increasing by 3.22% and non-food by 3.57%, respectively.
Among the twelve major divisions, all divisions saw an increase in price except for transport and communication, which witnessed a decrease in price. The cost of transportation dropped by -3.36%, and that of communication by 0.95%.
The escalating prices were particularly notable in specific categories. Food and non-alcoholic beverages witnessed a 3.24% increase, housing and utilities surged by 10.35%, and health expenses rose significantly by 13.18%.
However, the month-on-month CPI in May 2023 exhibited a decline of 0.39% compared to April 2023, with both food and non-food prices experiencing a decrease.
When compared to March 2023, transport prices fell by 1.55%,
This was followed by alcoholic beverages and betel nut, which dropped by 1.17%, and housing and utilities, which decreased by 0.48%.
In 2022, the prices of household goods and services exhibited a growth of 5.64%, which was a decrease of 1.71% from the 7.35% increase witnessed in 2021. “This reduction was attributed to the slower rate of food price growth, which stood at 3.95% in 2022, compared to the 9.38% increase observed in 2021,” as per the report.
Food prices contributed approximately 34% of the overall inflation rate, while non-food items accounted for 66% of the total increase. In 2021, food prices were the primary driver of inflation, contributing to nearly 60% of the total increase.
According to the report, among the twelve major divisions, food and alcoholic beverages made the largest contribution to the total increase in inflation in 2022, accounting for over 33%. This was followed by transport with about a 33% contribution, and clothing and footwear accounted for approximately 13% of the total inflation.
Transport recorded the highest increase in 2022, with a 12.59% rise, while alcoholic beverages and betel nuts experienced the lowest increase at 1.16%. All other divisions recorded increases, except for communication, which saw a decrease of 1.46%.
According to the CPI, the purchasing power of the Ngultrum as measured by the CPI stood at Nu 58 in May 2023, in comparison to December 2012. This means that Nu 100 in May 2023 would be equivalent to only Nu 58 in December 2012. The Purchasing Power of Ngultrum, as measured by the CPI, declined by 3.29% in the previous year (from May 2022 to May 2023) due to economic price hikes.
The CPI is a measure of the change in the prices of a fixed basket of goods and services over time. It shows how much, on average, prices of goods and services have increased or decreased over a particular reference period.
The CPI baskets have a total of 113 items (314 varieties) classified according to the Classification of Individual Consumption According to Purpose (COICOP).
Nidup Lhamo from Thimphu