Bhutan Records Lowest Inflation Rate In 2018 At 3.13 Percent


For the measurement of the current Consumer Price Index, prices are collected from a sample of 557 outlets.

At the Thimphu Weekend Food Market. (Source: Helsand Christian)


By Tshering Palden | Kuensel

Bhutan recorded the lowest inflation rate since the National Statistics Bureau (NSB) began its tracking 15 years ago.

The Consumer Price Index (CPI) or the inflation rate from December 2017 to December 2018, increased by 3.13 percent, up by 0.04 percentage point.

Further statistical breakdown of the Consumer Price Index

The increase in rate is mainly due to increase in food prices by 3.87 percent while non-food prices dropped by 0.11 percentage point to 2.65 percent as compared to 2.76 percent in November.

Local goods and services recorded higher increase with 3.24 percent compared to imported goods and services which increased by 3.03 percent.

Food prices (for both local and imported) recorded higher increase compared to the non-food group which increased by 2.65 percent.

However, local food prices increased by 4.26 percent as compared to 3.55 percent for imported food prices.

The CPI for December 2018 over the previous month of November went up by 0.39 percent which is 0.13 percentage point higher.

The increase is mostly fueled by food prices which rose 1.38 percent while prices dropped by 0.26 percent for non-food items, triggered by the decrease in prices of fuel.

Local goods and services increased by 0.75 percent while imported goods went up by 0.05 percent.

The NSB quoted the increase in prices of vegetables for the increasing CPI for local goods while the drop in fuel prices within this month has held the increase for imported goods to 0.05 percent although food prices recorded 0.89 percent increase.

The purchasing power of ngultrum (PPN), as measured by the CPI, had dropped from Nu 75 in January to Nu 73 in December. This means, Ngultrum 100 in December 2018 is worth only Ngultrum 73 at December 2012 prices, which was the reference period.


Inflation rate from Jan-Dec 2018

Photo: Kuensel


The PPN has decreased by 3.04 percent in the past 12 months due to price increase in the economy.

How is the Consumer Price Index derived?

The CPI shows how much, on average, the prices of goods and services have increased or decreased from a particular reference period, commonly known as the base period, which in this case is 2012.

The index considers 151 items (436 varieties) or sample of goods and services representative of all goods and services purchased by typical households in Bhutan.

Sample outlets are permanent establishments or retail shops from which the monthly price of goods and services are collected or quoted. These include groceries, clothing and footwear, restaurants, hardware shops, vegetable vendors and service providers etc.

The CPI is one of the major indicators that determine the effectiveness of an economic policy.

For the measurement of the current CPI, prices are collected from a sample of 557 outlets. It is used to formulate fiscal and monetary policies and monitor their effect on the overall economy.


This article first appeared in Kuensel and has been edited for Daily Bhutan.


Related Posts

Bhutan Expects Record Low Inflation In 2018

The nine-month average inflation rate this year was recorded at 2.61 percent, the lowest figure since 2004.

Dec 09, 2018 11:47

Fuel Price Cut Leads to Reduction in Consumer Price Index

“Drukair is passing on savings to consumers derived as a result of lower fuel prices with airfare reduction starting...

Mar 31, 2018 17:49

Asian Development Bank: Bhutan Among Fastest Growing Economies In...

In 2018, Bhutan’s GDP is projected to grow by 7.1 percent, the second highest growth after India (7.3 percent).

Jul 10, 2018 18:48

Bhutan’s National Revenue Records 24 Percent Growth

According to the provisional revenue report 2017-18, tax revenue increased to Nu 27.10B, an increase of 25 percent from...

Nov 23, 2018 12:05

Fuel Price Drop to Spur Economic Growth by 1%

“The drop in the prices will stimulate the economy by lowering the cost of transportation, resulting in a drop in prices...

Nov 27, 2017 10:48

Prices of Essential Commodities Remain Almost the Same Post-GST

The effect of Goods and Services Tax (GST) implemented from July 1 last year by India is yet to be felt on essential...

Apr 06, 2018 21:26



Bhutan Marked 100th Anniversary Of Save The Children, Highlighting Its Contributions

Save the Children office in Bhutan celebrated its 100th anniversary on 20th of September 2019.

Sep 21, 2019 23:08

Bhutan Is On Track To Achieve The 17 UN Sustainable Development Goals

Last year, the Voluntary National Review of Bhutan to UN found that except for networking and economic vulnerability, the country was on...

Sep 20, 2019 20:38


Reconstruction of Lingzhi Dzong – Built To Commemorate Bhutan’s Victory Over A Tibetan Invasion In 1668

To date, about Nu 13 million has been spent since preparatory works for the Lingzhi Dzong construction which began 15 months ago.

Sep 14, 2019 23:58

True Purpose of Rituals And Their Importance In Buddhism

Rituals are an indispensable way of life for a Bhutanese household and families are known to spend a fortune on them.

Sep 13, 2019 12:11


Bhutan’s Pelden Wangchuk Wins 10th Edition Of Tour 0f Dragon Mountain Bike Race

This year, the race also saw the highest number of female participants compared to past years.

Sep 10, 2019 01:08

Tour Of The Dragon – Toughest One Day Bike Race Starts On 7 September In Bhutan

It takes sheer toil and stamina for the top riders to complete the 268 km race which finishes at the capital, Thimphu.

Sep 06, 2019 23:58


Sherza Ventures Limited Launched IPO, Aims To Establish Brand Bhutan Products Globally And More

Sherza Ventures Limited aims to be a hyper retail and wholesale trading venture using e-commerce.

Sep 09, 2019 10:58

iMerit Bhutan Launched, Hopes To Create Far-Reaching Socio-Economic Impact

iMerit strives to drive social and economic change by tapping into an under-resourced talent pool, thereby creating digital inclusion.

Sep 04, 2019 10:58


Plans In The Pipeline To Develop Trongsa For Tourism

“The people of Trongsa were very supportive of the tourism development concept for the locality.”

Sep 05, 2019 14:48

7 Facts You Never Knew About Flying Into Bhutan

Druk Asia interviewed Namgyal Wangchuk, Senior First Officer with Drukair to find out what it's like to fly into Paro International Airport.

Aug 07, 2019 23:18


A Blend Of The Traditional And Contemporary – Showcasing The Best Of Bhutanese Products

The designers showcased their products at the RTA gallery on 18 September which was graced by Her Majesty the Queen Mother Sangay Choden...

Sep 19, 2019 23:50

7 Vegetables You Must Try While Visiting Bhutan

Read Tashi Choden's blog on the vegetables to try if you ever visit Bhutan.

Aug 31, 2019 16:43

Subscribe to our newsletter

Never miss out on new happenings and news stories!