Inflation continued its upward trajectory in Bhutan in July 2025, according to the latest data released by the National Statistics Bureau (NSB). The Consumer Price Index (CPI) showed a national inflation rate of 3.64% year-on-year, reflecting higher prices across both food and non-food categories. This represents an increase from the average inflation of 3.35% recorded from January to June 2025.
Food inflation remained the primary driver, climbing to 5.94% in July. Within this category, food and non-alcoholic beverages rose by 6.10%, while alcoholic beverages and betel nuts increased by 4.08%
Rising food costs reflect a combination of supply-side pressures and increased demand across regions, putting upward pressure on household expenditures.
Non-food inflation reached 1.57%, driven largely by higher costs in, clothing and footwear: (4.85%), household furnishings and maintenance (3.71%) and restaurants and hotels: 3.46%
Conversely, prices for communication services and transportation fell, with the communication index down 3.05% and transport declining 1.65%, providing a partial offset to the broader inflationary trend.
On a month-to-month basis, overall inflation in July was 1.65%. Here, food prices rose by 2.42%, primarily from increases in food and non-alcoholic beverages (2.52%) and alcoholic beverages (1.22%). Non-food prices increased by 0.91%, driven by transportation (2.52%), health (1.73%), and recreation & culture (1.22%). Communication services saw a slight decline of 0.06%.
The was diversity, based on regions with Thimphu recording year-on-year inflation of 4.36%. Food prices rose by 7.23%, led by food and non-alcoholic beverages (7.69%) Non-food prices rose by 1.78%, driven by furniture and household maintenance (5.38%) and clothing & footwear (5.25%) The monthly inflation was 1.89%, with food prices increasing by 3.20%
In the central region, annual inflation was 4.33%. Food prices rose 6.44%, and non-food prices 2.09%. Monthly inflation was 1.74%, with food and non-alcoholic beverages up by 2.67%
In the eastern region, year-on-year inflation was 3.94%. Food prices rose 5.06%, and non-food prices 2.64%. Monthly inflation was 2.24%, with food and non-alcoholic beverages up by 3.59%.
In the western region, annual inflation was 4.95%, the highest among regions. Food prices rose by 7.37% and non-food prices by 2.42%. Monthly inflation was 1.53%, led by food (1.94%) and transportation (2.62%)
Across all regions, communication services experienced slight declines, while inflation in food, clothing, and household goods consistently contributed the most to rising prices.
The July inflation data signals persistent cost pressures, particularly in essential goods such as food, which has direct implications for household budgets. Rising non-food prices, including clothing and housing-related goods, suggest broader price pressures in the economy.
While moderate, the increase in inflation could influence monetary policy decisions, cost-of-living adjustments, and fiscal planning in the coming months. Policymakers may monitor supply chains, seasonal price fluctuations, and regional disparities to ensure price stability and economic resilience.
Sherab Dorji from Thimphu
