The price of goods is on a steady rise. But it doesn’t stop there, according to the Asian Development Outlook 2021, inflation is expected to double in 2021 compared to last year. This, the local economists reflect is driven by surging demand and disruption in the supply chain due to the pandemic.
The inflation in 2020 was at 3 %, however, it is expected to increase to 6.4 % for 2021.
Going by the Consumer Price Index (CPI) report of the National Statistics Bureau, one cannot escape the reality that prices rose across the board compared to last year. The CPI has increased from 2.46 % last February to 9.54 % this February. This means the consumers are paying over 7 % more for the same commodities compared to the same month last year. The CPI is a measure of average price changes in the basket of goods and services purchased by households over time.
The price of food rose by 16.98 % compared to February last year. People complain that the price of needs in the market has increased significantly.
“We buy things every day so we know. For example. the price of a gas cylinder has increased by Nu 200 compared to last year. The prices of rice and oil are on rising and it has increased in just a few months,” said Dorji Tsho in Trongsa.
“Rice used to costs Nu 750 but now it costs Nu 1,050. And potatoes, it was Nu 15 per kilogram but now, within a year, it surged to Nu 50. The price is increasing but we can’t do anything. We have to buy,” added Anowar Hussian in Tashigang.
The Asian Development Outlook 2021, published recently, states that inflation rose mainly because of disrupted supply from India coupled with panic buying.
Moreover, retailers claim that transportation charges and expenses on loaders and escorts have increased, leading to an increased price for goods in the market.
The government, however, says nothing can be done about the inflation as the inflation in India is soaring due to the second wave of COVID-19.
“Whether we import or export, we deal with India for more than 70-80 %. Moreover, our ngultrum is pegged with Indian Rupee. so when India’s economy falls, it has an impact on our economy. The current inflation is not caused due to increase in money flow in individual’s hand. It is because of inflation and increase in production cost in India. Moreover, not enough is produced to meet the demand,” said Finance Minister Namgay Tshering.
As per the Asian Development Outlook 2021, the inflation is forecast to ease to 5.3 % for 2022 as prices are expected to fall in India when domestic conditions improve.
Sangay Chezom
