Inflation rises

Thimphu, September 08: The consumer price index has doubled in the second quarter of this year compared to the first quarter.

The first quarter showed only around 3 percent but by the end of the second June, it has reached 6.2, according to the Royal Monetary Authority (RMA).

The RMA cited the cause of this increase as rising prices of both food and non-food items.
 
The import has sharply increased and trade deficit risen by three fold reaching Nu 8.4 billion compared to last year.

A negative overall balance of Nu. 918.5 million has been recorded.
 
The stock of external debt outstanding crossed US$ 670 million as of March 2006. It is an increase by 2.3 percent from December 2005.
 
Of this, US$ 258.4 million were outstanding convertible currency debts and Rs. 18.4 billion Indian Rupee debts. Debt servicing in 2005-06 (March 2006) amounted to US$ 5 million in convertible currency and Rs.488 million in Indian Rupee.

However, the gross international reserves increased by 20 percent amounting to US$ 451.7 million in May this year. Convertible currency reserves increased by 35 percent to US$ 366.8 million while the Indian Rupee reserves decreased by 15.9 percent to Rs. 3.8 billion.
 
This reserve is sufficient to finance 11.8 months of imports.

The continuing inflation has also chopped down the purchasing power of the Ngultrum from 0.89 in the first quarter to 0.86 in the second quarter against US$. Bhutan News Service/Sangey Oendrey