ThimphuTech was the first technology blog in Bhutan. We started writing it in 2009, just as broadband and mobile internet started to take off. (Although internet in Bhutan was launched in 1999, it was either super-slow or super-expensive, and was only used by a selected few).

In the blog, we wrote about technology and food, but also about plenty of other stuff. The blog became popular and influential in Bhutan. A companion bi-weekly column -- Ask Boaz -- was published for many years in the Kuensel, Bhutan's national newspaper. (The complete Kuensel columns are available as an ebook, Blogging with Dragons).

We stopped updating the blog when we left Bhutan in 2014, but the information within the posts can still prove useful, and thus we decided to keep it online.

We thank all our readers.
Tashi Delek,
Boaz & Galit.

Wednesday, May 1, 2013

How The Bhutanese miscalculated inflation

Every year prices increase in Bhutan. This is inflation. Here are the inflation figures from the last 5 years, as taken from an article on Bhutan's inflation in The Bhutanese.
  • 2008: 8.31%
  • 2009: 4.41%
  • 2010: 7.02 % 
  • 2011: 8.86% 
  • 2012: 10.93%.
The inflation from 2008 to 2012 was 46.1%. According to the article, however, it was 39.5%. The reporter calculated that number by wrongly adding the percentages. This is a mistake.

Imagine that the annual inflation is 20%. If one kg of ema costs Nu 100, the next year the price inflates to Nu 120. And the next year? 20% on top of Nu 120, which is Nu 144. The total inflation in two years was 44%, not 40%.

If you do the math right, you'll end up with a 5-year cumulative inflation of 46.1%, not 39.5%.

Other figures in the story are also misleading. Hopefully the paper will publish a revised article with the correct numbers.

No comments:

Post a Comment

We love to hear from our readers!
Comments are reviewed before being published, so it might take a few hours before you see your comments posted.

Note: Only a member of this blog may post a comment.