Consumer price inflation in Nepal eased to 4.16 percent in mid-February, reflecting a decline in the prices of both food and non-food items, according to the Current Macroeconomic and Financial Situation Report released by Nepal Rastra Bank (NRB) on Monday.
The report highlights a 0.85 percentage point decline in year-on-year inflation, down from 5.01 percent in the same period last year. The inflation rate in the seventh month of the current fiscal year was also lower than the 5.41 percent recorded in the previous month.
The NRB data shows that the growth rate of average food prices increased by 4.95 percent, a drop from 6.59 percent in the previous month. Similarly, non-food and service inflation declined slightly to 3.74 percent from 3.98 percent.
Under the food and beverage category, the year-on-year price index of ghee and oil sub-category increased by 12.80 percent, pulses and legumes by 9.06 percent, vegetables by 7.56 percent, and cereal grains and their products by 6.36 percent, while the price of spices decreased by 2.98 percent. Retailers attribute the recent nominal decline in food grain prices to India’s decision to lift restrictions on exports of certain food items.
In the non-food and services category, the price index of miscellaneous goods and services sub-category increased by 10.91 percent, clothing and footwear by 5.36 percent, alcoholic drinks by 5.08 percent, transportation by 5.01 percent, tobacco products by 4.10 percent, and furnishing and household equipment by 4.07 percent.
Inflation varied across provinces, with Koshi Province experiencing the highest rate at 6.15 percent, followed by Sudurpaschim at 4.71 percent, Lumbini at 4.16 percent, Karnali at 4.05 percent, Madhesh at 3.91 percent, Gandaki at 3.40 percent, and Bagmati at 3.35 percent.
By geographic region, inflation was highest in the mountain region at 5.21 percent, followed by the Terai at 4.25 percent, the hills at 4.11 percent, and Kathmandu Valley at 3.53 percent.
NRB records indicate that consumer price inflation has moderated mainly over the past two months. The government aims to maintain inflation within 5.5 percent for the fiscal year 2024/25.
