Consumer price inflation rose to 7.74% in 2022/23

KATHMANDU: The consumer price inflation for the fiscal year 2022/23 surged to 7.74%, compared to 6.32% recorded a year earlier. The budget for the fiscal year 2022/23 had targeted to contain inflation at 7%.

The Current Macroeconomic and Financial Situation Report released by the Nepal Rastra Bank (NRB) on Friday underscores the growing financial pressure on consumers. The annual average inflation within the food and beverage category reached 6.62% in 2022/23, up from 5.69% a year earlier. Monthwise, food and beverage inflation was 7.38% in the final month of the current fiscal year (mid-June to mid-July), compared to 6.89% in the same period a year ago. Within the food and beverage category, the annual average consumer price index reveals a significant rise in various sub-categories. Restaurant and hotel costs have escalated by 14.42% percent, spices by 12.50%, cereal grains and their products by 10.70%, tobacco products by 9.88%, and milk products and eggs by 9.23%.

The annual average non-food and services inflation in 2022/23 rose to 8.62%, compared to 6.83% in the previous fiscal year. The non-food and services inflation moderated to 7.48% in mid-July 2023 compared to 9.03% reported a year ago. In the non-food and services category, transportation expenses went up by 13.50%, recreation and culture by 10.18%, health-related costs by 10.01%, education by 8.79%, and housing and utilities by 8.65%.

The year-on-year consumer price inflation as of mid-July 2023 stood at 7.44 percent, showing a marginal decrease from the 8.08 percent recorded in the same period of the previous fiscal year.

Consumer price inflation varied across regions in Nepal. In the fiscal year 2022/23, the inflation rate in the Kathmandu Valley was 7.55% in Kathmandu Valley, while it were 8%, 7.56%, and 7.12% in Tarai, hilly and mountainous region, respectively. The inflation rate was 5.73 % in Kathmandu Valley, and 6.41%, 6.87%, and 6.07% in Tarai, hilly and mountainous districts, respectively, in 2021/22.

Wholesale price inflation, on the other hand, moderated to 8.47% in 2022/23, compared to 9.51% a year earlier.