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CPI increases to a record high in July compared to the last five years

September 24, 2020
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Year-on-year Consumer Price Index increased to a record high in July this year making it the highest increase over the past five years. It increased by 7.56 per cent compared to the same month last year. It means on average consumers are paying 7.56 per cent more compared to what they paid in July last year for the same goods and services.

Consumer Price Index measures the average change in prices over time that consumers pay for a basket of goods and services, commonly known as inflation.

The increase in the Consumer Price Index is due to an increase in food prices. Within the food groups, it is an increase in prices of meat, fish, vegetables, milk, cheese and eggs, and fruits that contributed to the increase. The increased indicates an increase in the inflation rate of the country.

Non-food items recorded only 1.68 per cent increase over the past year. All groups within the non-food recorded an increase except for communication which has dropped by 6.16 per cent mainly due to a drop in data charges.

Consumer Price Index attempts to quantify the aggregate price level in an economy and thus measure the purchasing power of a country’s unit of currency.

As a result of the price increase in the economy, the purchasing power of ngultrum has dropped by 4.34 per cent over the past one year. What could be bought for Nu 67 in 2012 is now costing Nu 100.

Phub Gyem

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