Nepal’s inflation rate fell significantly in the first quarter of the current fiscal year, with average inflation standing at 1.67 percent, a sharp decline from 4.26 percent recorded in the same period last year.
This data was released on Sunday by the Nepal Rastra Bank (NRB) in its report, Current Macroeconomic and Financial Situation of Nepal, based on the first three months of FY 2025/26. According to the central bank, the decline in inflation was driven largely by stabilized prices of food and beverage items.
The report further noted that year-on-year (y-o-y) consumer price inflation dropped to 1.47 percent in mid-October 2025, compared to 4.82 percent a year earlier. The figure is also lower than 1.87 percent recorded in mid-September this year.
Between mid-September and mid-October, food and beverage inflation stood at 2.54 percent, while non-food and services inflation rose by 3.80 percent. In the same period last year, these rates were significantly higher at 7.20 percent and 3.49 percent, respectively.
Within the food and beverage category, the y-o-y price index increased for:
- Ghee and oil: 7.75%
- Non-alcoholic beverages: 3.71%
- Meat and fish: 3.15%
However, prices fell for:
- Vegetables: –15.63%
- Spices: –7.82%
- Pulses and legumes: –4.41%
In the non-food and services category, the y-o-y price index increased for:
- Miscellaneous goods and services: 15.51%
- Education: 7.67%
- Clothing and footwear: 6.29%
- Tobacco products: 4.84%
- Furnishing and household equipment: 4.55%
The only decrease in this group was in:
- Insurance and financial services: –0.23%
During the review month, the y-o-y price index rose 1.29 percent in rural areas and 1.53 percent in urban areas.
Across provinces, y-o-y consumer price inflation stood at:
- Koshi: 2.33%
- Madhesh: 1.20%
- Bagmati: 1.13%
- Gandaki: 1.16%
- Lumbini: 1.89%
- Karnali: 1.91%
- Sudurpashchim: 0.69%
By geographic regions, inflation stood at:
- Kathmandu Valley: 1.43%
- Terai: 1.29%
- Hill: 1.50%
- Mountain: 2.33%
Wholesale Price Inflation
Year-on-year wholesale price inflation (WPI) stood at 1.32 percent in mid-October 2025, down from 5.51 percent a year earlier.
The breakdown shows:
- Consumption goods: –1.24%
- Intermediate goods: 2.71%
- Capital goods: 2.40%
- Construction materials: 3.88%
The salary and wage index rose 4.48 percent in the first quarter of FY 2025/26, up from 3.31 percent a year earlier.
Provincial y-o-y salary and wage increases were:
- Koshi: 1.12%
- Madhesh: 3.62%
- Bagmati: 4.16%
- Gandaki: 9.42%
- Lumbini: 6.68%
- Karnali: 1.36%
- Sudurpashchim: 5.62%
Inflation Comparison: Nepal and India
Y-o-y consumer price inflation in Nepal stood at 1.47 percent in mid-October 2025, while India’s inflation for October 2025 was 0.25 percent.
