Inflation stays above 6.5% target in first two months of 2023/24

KATHMANDU: Consumer price inflation in the second month of the current fiscal year ending mid-September stood at 8.19%, showing a slight decrease compared to 8.64% in the same period of the previous year. The Nepal Rastra Bank (NRB) has set a target of containing inflation at 6.5% in the current fiscal player.

Inflation within the food and beverage category was recorded at 9.74%, while non-food and service inflation stood at 6.99% in the review month.

According to the Current Macroeconomic Situation Report unveiled by the Nepal Rastra Bank (NRB) on Tuesday, prices in the spices sub-category of the food and beverage category surged by 45.46%, sugar & sugar products by 17.86%, vegetables by 14.51%, cereal grains & their products by 13.38%, milk products & eggs by 12.60%, and restaurants & hotels by 10.97%. However, the y-o-y price index of the ghee & oil sub-category saw a decrease of 13.08% in the review month.

Under the non-food and services category, prices for recreation & culture increased by 15.55%, miscellaneous goods & services by 12.21%, education by 9.10%, housing & utilities by 8.11%, and furnishing & household equipment by 6.59%. In contrast, the transportation sub-category saw a minor decline of 0.18%.

Consumer price inflation in the Kathmandu Valley, Terai, Hill, and Mountain regions stood at 9.83%, 7.03%, 8.09%, and 11.32%, respectively, in the review month, up from 7.62%, 9.33%, 8.82%, and 6.68%, respectively, compared to a year ago.

Wholesale price inflation in mid-September 2023 stood at 4.78% on a y-o-y basis, a significant decrease from the 14% reported a year ago. Consumption goods experienced an 8.23% increase, intermediate goods saw a 3.14% price rise, and prices of capital goods increased by 2.80% year-on-year. In contrast, the wholesale price of construction materials decreased by 0.03% in the review month.

The salary and wage rate index increased by 5.25% in mid-September 2023, down from 11.68% the previous year. In the review month, the salary index and wage rate index increased by 1.05% and 6.53%, respectively.

Consumer price inflation in Nepal remained at 8.19% in mid-September 2023, while India reported a lower rate of 5.02% in September 2023.