Price hike goes down by over 7.5 percent

KATHMANDU, SEPTEMBER 27 : The year-on-year Consumer Price Inflation (CPI) stood at 4.10 percent in Shrawan (mid-July to mid-August, 2024), the first Nepali month of the current fiscal year. The reflects a significant decrease from 7.52 percent in the same period last year, according to the Current Macroeconomic and Financial Situation report released by Nepal Rastra Bank (NRB) yesterday. This reduction in inflation was attributed to the slower growth in the prices of non-food items and services during the review period.

The inflation rate during the review month was also lower than the annual average of 5.44 percent recorded in 2023/24.

Fom mid-July to mid-August this year, food and beverage inflation stood at 6.17 percent, while non-food and service inflation was limited to 2.94 percent. In contrast, these categories saw price increases of 8.90 percent and 6.62 percent, respectively, during the same period in FY 2023/24.

Within the food and beverage category, the year-on-year price indices of vegetables, pulses/ legumes and, cereal grains increased by 19.07 percent,12.09 percent, and 9.15 percent respectively. The prices of milk products and eggs rose by 3.66 percent, while the spices sub-category showed a decrease of 2.75 percent.

Under the non-food and services category, the year-on-year price index of miscellaneous goods and services increased by 7.94 percent, alcoholic drinks by 5.38 percent, clothes and footwear by 4.58 percent, and tobacco products by 3.52 percent.

During the review month, the CPI in rural areas increased by 4.28 percent, while in urban areas, it rose by 4.03 percent. Province-wise, the year-on-year CPI for Koshi Province increased by 4.61 percent, Madhesh Province by 4.17 percent, Bagmati Province by 3.49 percent, and Gandaki Province by 3.90 percent. Likewise, the CPI for Lumbini Province rose by 3.81 percent, Karnali Province by 3.46 percent, and Sudurpashchim Province by 6.69 percent.

In the same period, the CPI in the Kathmandu Valley, Terai, Hill, and Mountain regions surged by 3.62 percent, 4.49 percent, 3.67 percent, and 4.53 percent, respectively. Inflation in these regions a year ago was significantly higher at 8.50 percent, 6.70 percent, 7.50 percent, and 11.46 percent, respectively.

The year-on-year wholesale price inflation stood at 3.66 percent in mid-August 2024, compared to 4.34 percent last year. The wholesale price index of consumption goods increased by 1.51 percent, intermediate goods by 5.18 percent, and capital goods by 2.08 percent. Meanwhile, the year-on-year wholesale price of construction materials decreased by 4.21 percent in the review month.

According to the NRB, it used revised measures to estimate the inflation rate for the review month. The central bank considered FY 2014/15 as the base year and incorporated 525 goods and services from 87 different markets across 77 districts for its estimations.