Goods and services became costlier by 6.47 percent in October last year

SONAM PENJOR | Thimphu

The prices of goods and services became costlier by 6.47 percent in October 2021 compared to the price in the same month last year, according to the Consumer Price Index (CPI) October 2021 report published by National Statistics Bureau.

The report states that the rate increased after recording a drop in the previous three months from July until September. 

The increase was contributed by food and alcoholic beverages, clothing and footwear, housing and utilities, and transport, accounting for about 85 percent of the total increase. 

The change in transportation contributed to 11.17 percent followed by clothing and footwear with 10.92 percent, and alcohol beverages contributed to 10.67 percent in a year.

“The increase in transportation cost was because of the increase in the petrol price by 39 percent and diesel by 51 percent,” states the report.

Within food, the report further states that the price of sugar recorded the highest increase followed by cooking oils and meat. 

The report states that the price of liquid petroleum gas (LPG) went up by 50.7 percent and kerosene by 58.2 percent contributing to the cost increase in housing and utilities. 

Similarly, month-on-month CPI from September to October was increased by 1.74 percent because of an increase in the price of vegetables and fruits by five percent, sugar by 23.90 percent, and fuel which includes petrol and diesel by about 7.7 percent on average. 

Meanwhile, the purchasing power of Nu as measured by CPI is Nu 63 as of October 2021 compared to December 2012. This means Nu 100 in October 2021 is worth only Nu 63 at December 2012 prices. The Purchasing Power of Ngultrum (PPN) has dropped by 6.08 percent between October 2020 to October 2021 because of the price increased in the economy.

The CPI is a measure of average price changes in the basket of goods and services purchased by households over time. It shows how much, on average, prices of goods and services have increased or decreased from a particular reference period, commonly known as the Index reference, the report further states.

While the CPI covers the goods and services consumed by the households, a sample of goods and services are selected using the household expenditure data to measure the inflation experienced by the households. 

According to the report, the prices of the sampled goods and services are collected from urban areas in 20 dzongkhags on a monthly, quarterly, and annual frequency depending on the price volatility of the items.

The outlets for data collection are selected based on purposive sampling considering the popularity of the outlet and the availability of the items.

CPI baskets have 113 items (314 varieties) classified according to the Classification of Individual Consumption According to Purpose (COICOP). About 450 outlets are selected for pricing.

Meanwhile, the price reference is the period for which the prices are used as the denominator for the index calculation. The price reference period for CPI is April 2019. The index reference period is the period for which the index is set as 100. The index reference period is April 2019.