Consumer prices in Nepal rose sharply in mid-June 2026, with year-on-year inflation climbing to 5.22 percent, nearly double the 2.72 percent recorded during the same period last year, according to the Nepal Rastra Bank (NRB).
The latest Current Macroeconomic and Financial Situation of Nepal (11-Month Review) released by the central bank shows that the increase was driven by rising prices of both food and non-food items, reflecting growing cost pressures across the economy.
The report reveals that food and beverage inflation reached 4.95 percent, compared to just 0.54 percent a year ago. Likewise, non-food and services inflation increased to 5.37 percent, up from 3.94 percent during the corresponding period last year.
Market analysts attribute the sharp rise primarily to higher petroleum prices, increased transportation costs, and weak market monitoring. During the review period, petrol prices surged from Rs 157 per litre before the recent Middle East tensions to Rs 217 per litre, while diesel prices climbed from Rs 142 to Rs 225 per litre. The increase in fuel costs has significantly raised transportation expenses, which in turn has pushed up the prices of essential commodities and services across the country.
Among food items, fruits recorded the highest annual price increase of 17.40 percent, followed by ghee and edible oils at 15.10 percent. Prices of meat and fish rose by 5.26 percent, while vegetables became 4.14 percent more expensive. In contrast, the price of pulses and legumes declined marginally by 0.93 percent.
Within the non-food and services category, the highest increase was seen in miscellaneous goods and services, where prices rose by 16.68 percent. Transportation costs climbed 15.31 percent, followed by alcoholic beverages (7.20 percent), education (5.54 percent), and clothing and footwear (5.53 percent).
The impact of inflation was more pronounced in urban areas, where prices increased by 5.38 percent, compared to 4.78 percent in rural regions.
Province-wise, Koshi Province recorded the highest inflation rate at 5.75 percent, followed by Madhesh and Lumbini provinces, both at 5.62 percent. Gandaki recorded 5.05 percent, Karnali 4.89 percent, Bagmati 4.79 percent, while Sudurpashchim reported the lowest inflation at 4.61 percent.
By geographical region, the Terai experienced the highest inflation at 5.74 percent, followed by the Hill region (5.07 percent) and Kathmandu Valley (4.98 percent). The Mountain region recorded the lowest inflation at 3.71 percent.
Despite the sharp increase in June, the overall inflation trend for the fiscal year remained relatively moderate. According to the NRB, the average consumer price inflation during the first 11 months of FY 2025/26 stood at 2.89 percent, lower than the 4.24 percent recorded during the same period of the previous fiscal year.
The latest figures suggest that while Nepal experienced a noticeable spike in inflation toward the end of the fiscal year due to higher fuel prices and supply-side pressures, average price growth remained below last year’s level. Economists say the inflation outlook for the coming months will largely depend on global energy prices, domestic supply conditions, and the effectiveness of market monitoring and price stabilization measures.
