Nepal's consumer price inflation rate has eased a bit, providing some relief to consumers. As per the Nepal Rastra Bank (NRB), consumer price inflation slowed down to 4.16 percent in mid-February. This is an appreciable fall compared to 5.01 percent during the same time last year. Food and non-food items also saw a slowdown in the pace of price increase, which brought respite to families as this lessened the load on their pocketbooks. Economic indicators are encouraging. One of the reasons why inflation softened is the recent stabilization of food prices. The NRB report shows that prices of food and beverages grew 4.95 percent, down from the 6.59 percent expansion recorded in the previous month. One of the significant contributory reasons was the action of India to remove the ban on food grain exports. This caused cereal and grain prices, which had been constantly increasing, to dip slightly. Decline in global fuel prices have also made transportation cheaper, and this has had an indirect impact on food prices.
Non-food and services inflation also went down from 3.98 percent to 3.74 percent. Though the prices of goods like clothing, footwear, and transport services continued to rise, the rate of increase was slower than earlier. This indicates that market demand has been constant, and hence, prices did not rise considerably. The trend of inflation, however, varies across various provinces and regions. The Koshi Province saw the highest inflation of 6.15 percent, and the lowest was in Bagmati Province at 3.35 percent. Similarly, the mountainous region witnessed the highest inflation of 5.21 percent and the lowest in the Kathmandu Valley at 3.53 percent. The disparity indicates region-wise policies for an effective control of inflation. While the recent moderation in inflation is a relief, steps must be taken to strengthen the trend. The government will guarantee the continuous supply of basic commodities by promoting hassle-free import and export of goods and by maintaining good relations with the neighboring nations. The promotion of domestic agricultural production will also minimize our heavy reliance on imports, which will help stabilize food prices over time.
Furthermore, proper monitoring of market prices and firm action against price manipulation by traders will be necessary in preventing unwarranted inflation. Also, the contribution of monetary policy to inflation management cannot be ignored. The NRB has to keep managing liquidity in the market to avoid an excessive supply of money that may ignite inflationary pressures. Likewise, interest rates must be properly managed to adjust inflation and economic growth. The government must also emphasize the provision of infrastructure facilities to decrease the cost of transportation and distribution, which directly contributes to inflation. While the government has established an inflation target of 5.5 percent for the ongoing fiscal year, it has a long way to go to make it happen. The rates of essential items like oil, pulses, and vegetables are still not decreasing considerably, which is impacting the purchasing power of the common public. Price stability demands strong market monitoring, price control, and economic policies. As all citizens gain from less inflation, the latest easing of inflation is in the correct direction, but more needs to be done to help maintain future prices under control. Here, our government, businesses, and consumers must join forces to help achieve long-run price stability and economic expansion through the effective implementation of financial and monetary measures.