Last week, I stopped by my local mart to pick up some everyday groceries. While scanning the shelves, I reached for a 25 kg bag of rice, only to be shocked by the price. It was Rs 2,400, an amount that used to buy nearly two bags not too long ago. Surprised, I asked the shopkeeper, “Why is it so expensive these days?” He sighed and replied, “Ke garne, dai? Sabai kura mahango bhayo.”
This wasn’t a one-off moment; it’s a reality facing nearly every household in Nepal. The cost of essentials has ballooned, while luxuries like imported chocolates and high-end electronics remain relatively unaffected. This imbalance is the essence of cheapflation, a quiet crisis that hits hardest where it hurts the most: in our wallets and on our dinner plates.
Cheapflation is not just inflation. It is a lopsided rise in the cost of goods that disproportionately affects the poor and the middle class. Essentials like rice, lentils, and cooking oil, the cornerstones of Nepalese diets have become significantly more expensive. According to Nepal Rastra Bank, the price of rice rose from Rs. 50 per kilogram in 2019 to Rs. 80 in 2023, a 60% increase (although some of this is also due to India’s export ban ). The price of cooking oil has gone from Rs. 150 per liter to Rs. 250 during the same period, a 67% hike. On the other hand, imported chocolates, which cost Rs. 200 per bar a few years ago, have barely budged. The disparity is glaring and symbolic of the growing inequality in Nepal’s economy.
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Globally, supply chain disruptions caused by the COVID-19 pandemic, rising transportation costs, and geopolitical tensions have driven up the cost of essentials. A 2023 World Bank report noted that the average global inflation rate for essential goods was 8.3%, compared to just 4.1% for luxury items. In Nepal, the problem is amplified by our heavy reliance on imports for basic goods. Approximately 70% of our consumer goods are imported, leaving prices at the mercy of international markets.
The effects of cheapflation are painfully visible in Nepalese households. A 2023 report by the Central Bureau of Statistics showed that food expenses now account for 58% of household budgets, up from 45% in 2018. Private school fees have also seen a sharp rise, with annual fees in mid-tier schools increasing from Rs. 36,000 to Rs. 50,000 in the last four years. Housing adds another layer to the crisis. Rent prices in Kathmandu (outside ring-road), once averaging Rs. 15,000 per month for a two-bedroom apartment in 2019, now hover around Rs. 25,000.
Yet, government policies to address these issues remain toothless. Instead of meaningful interventions, the government focuses on short-term gimmicks, such as Rs. 10 discounts on rice during Dashain, which barely scratches the surface of the problem.
The government’s missteps are not just negligent; they are exacerbating the crisis. Recent budgets have prioritized tax breaks for luxury imports while ignoring subsidies for staples. In 2022, import duties on electric vehicles were slashed by 50%, but no parallel efforts were made to stabilize the prices of food or cooking gas. To paraphrase George Orwell, “All goods are equal, but some goods are more equal than others.
This inaction has severe implications. Cheapflation is not merely an economic issue; it is a social one. As essentials become increasingly unaffordable, the gap between the rich and the poor widens, fueling resentment and the potential for social unrest. When families are forced to choose between food and education, the cycle of poverty tightens its grip. Cheapflation is more than just rising prices; it’s a reflection of deeper systemic inequities that Nepal can no longer afford to ignore.
