KATHMANDU, Nov 16: Nepal’s inflation rate declined sharply in the first quarter of the current fiscal year, with average inflation standing at 1.67 percent, down from 4.26 percent in the same period last year.
This data was published on Sunday by the Nepal Rastra Bank in its report Current Macroeconomic and Financial Situation of Nepal based on three months’ data of 2025/26. According to the central bank, the slowdown in inflation was mainly driven by stabilizing prices of food and beverage items during the review period.
The report further stated that year-on-year consumer price inflation fell to 1.47 percent in mid-October 2025, compared to 4.82 percent in mid-October last year. The figure is also lower than the 1.87 percent recorded in mid-September this year.
During mid-September to mid-October, the food and beverage inflation stood at 2.54 percent whereas non-food and service inflation stood at 3.80 percent. During the same period in the previous year, the price indices of these groups had increased 7.20 percent and 3.49 percent, respectively.
Under the food and beverage category, y-o-y price index of ghee and oil sub-category increased 7.75 percent, non-alcoholic drinks 3.71 percent and meat and fish 3.15 percent while y-o-y price index of vegetable sub-category decreased 15.63 percent, spices 7.82 percent and pulses and legumes 4.41 percent.
Effect of inflation in Kathmandu Valley: Prices of food and bev...
Under the non-food and services category, y-o-y price index of miscellaneous goods and services sub-category increased 15.51 percent, education 7.67 percent, clothes and footwear 6.29 percent, tobacco products 4.84 percent, and furnishing and household equipment 4.55 percent while y-o-y price index of insurance and financial services sub-category decreased 0.23 percent.
During the review month, the y-o-y price index in rural areas increased 1.29 percent, while in urban areas, it rose 1.53 percent.
Based on provinces, y-o-y consumer price inflation in the review month in Koshi Province stood at 2.33 percent, Madhesh Province 1.20 percent, Bagmati Province 1.13 percent, Gandaki Province 1.16 percent, Lumbini Province 1.89 percent, Karnali Province 1.91 percent, and Sudurpashchim Province 0.69 percent.
Likewise, the y-o-y consumer price inflation in the Kathmandu Valley, Terai, Hill and Mountain region stood at 1.43 percent, 1.29 percent, 1.50 percent and 2.33 percent respectively.
Wholesale Price Inflation (WPI)
The y-o-y wholesale price inflation stood at 1.32 percent in mid-October 2025 compared to 5.51 percent a year ago.
The y-o-y wholesale price inflation of consumption goods decreased 1.24 percent while intermediate goods and capital goods stood at 2.71 percent and 2.40 percent respectively. The y-o-y wholesale price index of construction material increased 3.88 percent in the review month.
The y-o-y salary and wage index increased 4.48 percent in the first quarter of fiscal year 2025-26 compared to 3.31 percent a year ago.
Based on provinces, in the review quarter, the increase in y-o-y salary and wage index in Koshi Province stood at 1.12 percent, Madhesh Province 3.62 percent, Bagmati Province 4.16 percent, Gandaki Province 9.42 percent, Lumbini Province 6.68 percent, Karnali Province 1.36 percent, and Sudurpashchim Province 5.62 percent.
Consumer Price Inflation in Nepal and India
The y-o-y consumer price inflation in Nepal remained at 1.47 percent in mid-October 2025. Such inflation in India stood at 0.25 percent in October 2025.
