IMF projects Bhutan’s 2023 inflation at 6.6 per cent

Buying goods and services is expected to become even more expensive for Bhutanese households as the International Monetary Fund or the IMF projects Bhutan’s annual inflation rate for this year at 6.6 per cent. On the global front, the IMF’s latest World Economic Outlook report predicts global inflation to fall from 8.8 per cent last year to 6.6 per cent this year.

The sky-high inflation rate in Bhutan, fueled by the Covid pandemic is on the decline according to figures maintained by the National Statistics Bureau or NSB.

However, the latest numbers issued by the IMF show a gloomy outlook for the import-driven Bhutanese economy.

Projected at 6.6 per cent, the IMF number is one per cent more than the NSB’s 2022 annual inflation figure.

Globally, the IMF projects global inflation to decline by over two per cent.

However, despite projecting a decline in the inflation rate, the IMF’s chief economist warns that the fight against inflation is not over.

Speaking at the launch of the latest World Economic Outlook update, the chief economist Pierre-Olivier Gourinchas said markets remain vulnerable.

He said “Inflation could remain stubbornly high with continued labor market tightness and growing wage pressures requiring tighter monetary policies. An escalation of the war in Ukraine remains a major threat and could destabilize energy and food markets and further fragment the global economy.”

The chief economist said, this time around, the global economic outlook hasn’t worsened. However, the road back to a full recovery with sustainable growth, stable prices, and progress for all has only started.

Meanwhile, despite the expected decline in inflation rates, the global economic growth rate is expected to slow from 3.4 per cent in 2022 to 2.9 per cent this year.

The global economy is then projected to rebound to 3.1 per cent in 2024.

Kinzang Khadon

Edited by Sherub Dorji

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