The rate at which prices of goods and services increase in the market has slowed down in June compared to the same month last year. The National Statistics Bureau recorded the inflation rate for June at 1.84 per cent, down from nearly four per cent in June 2023. According to a news release from the NSB, this downward trend was primarily driven by decreases in the costs of communication, housing and utilities, recreation, transport, and education. However, economists warn that this slowdown could have long-term impacts on the economy.
The rate at which food prices increased slowed significantly. Food inflation dropped to 2.39 per cent, down from nearly five per cent in June last year.
Within the food category, food and non-alcoholic beverages were the primary drivers of this downward trend.
Non-food inflation also fell to about two per cent in June this year, down from just over three per cent during the same period last year.
Decreases in the costs of communication, housing and utilities, recreation and culture, education, transport, furnishing and household equipment mainly drove the reduction in non-food inflation.
“We cannot say that the prices of goods and services have dropped. We can only say that compared to June 2023 prices, in June 2024, the price has increased by 1.84 per cent but the rate of increase has slowed down,” said Karma Deki, statistical officer at NSB.
However, economist Chandra Dakal (PhD) warn that continual slowdown in the inflation rate is not a good sign for the country’s economy. The economist said the drop in inflation for June is concerning but not alarming adding that it should not decrease below three per cent.
As per the Monetary Policy Statement 2024, the central bank’s target inflation rate is set at 4.5 per cent for this year and 2025.
Meanwhile, starting June 2024, the NSB will publish separate consumer price indexes for the capital city, central, eastern, and western regions.
“It was mainly in response to data demands from users. The data users wanted to have the CPI at a much lower level. And in the case of Bhutan, the lower level would be the regions,” added Karma Deki.
According to the NSB, these regional variations will provide a more accurate picture of price changes and the cost of living across different parts of the country.
Samten Dolkar
Edited by Sherub Dorji
