Consumer price inflation moderated to 4.10 percent last month due to stable prices of non-food and services

KATHMANDU, Sept 26: The year-on-year consumer price inflation (CPI) stood at 4.10 percent in mid-August 2024, down from 7.52 percent in the same period last year.

The Current Macroeconomic and Financial Situation of Nepal unveiled by Nepal Rastra Bank (NRB) on Thursday, shows that the average price hike was moderated in the first month of the current fiscal year. The reduction in inflation was attributed to the slow growth in the prices of non-food and services during the review month.

The price inflation in the first month of the current FY was even less compared to the annual average of the last FY. The annual average consumer price inflation stood at 5.44 percent in FY 2023/24.

During mid-July and mid-August this year, food and beverage inflation stood at 6.17 percent whereas non-food and service inflation stood at 2.94 percent. During the same period in the fiscal year 2023/24, the price indices of these groups increased by 8.90 percent and 6.62 percent, respectively.

Under the food and beverage category, the year-on-year price index of vegetable sub-category increased 19.07 percent, pulse and legumes 12.09 percent, cereal grains and their products 9.15 percent. Similarly, prices of milk products and eggs increased 3.66 percent while that of spices sub-category decreased 2.75 percent.

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

During the review month, the price index 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 in Koshi Province rose 4.61 percent, Madhesh Province 4.17 percent, Bagmati Province 3.49 percent and Gandaki Province 3.90 percent. Likewise, the CPI of Lumbini Province increased 3.81 percent, Karnali Province 3.46 percent, and that of Sudurpashchim Province stood at 6.69 percent.

In the review month, the CPI in the Kathmandu Valley, terai, hill and mountain regions surged 3.62 percent, 4.49 percent, 3.67 percent and 4.53 percent respectively. Inflations in these regions were 8.50 percent, 6.70 percent, 7.50 percent and 11.46 percent, respectively, a year ago.

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, intermediate goods and capital goods increased 1.51 percent, 5.18 percent and 2.08 percent, respectively. The year-on-year wholesale price of construction material decreased 4.21 percent in the review month.

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