Himal Press 
KATHMANDU: Annual average consumer price inflation moderated to 3.08% in fiscal year 2025/26, down from 4.06% a year earlier, according to the latest macroeconomic report from Nepal Rastra Bank.
Despite the overall annual moderation, inflation accelerated significantly toward the end of the fiscal year, with year-on-year consumer price inflation jumping to 5.14% in mid-July 2026 compared to 2.20% a year prior.
Both major expenditure groups registered higher year-on-year increases. Food and beverage inflation stood at 5.25% in mid-July, contrasting with a 1.19% decline a year earlier, while non-food and services inflation rose to 5.08% from 4.12%.
On an annual basis, price movements varied sharply across individual sub-categories. Within food and beverages, price indexes increased for ghee and oil (10.05%), fruit (7.09%), and non-alcoholic drinks (3.28%), while prices of vegetables (3.95%), spices (3.66%), and pulses and legumes (3.41%) dropped. In the non-food and services category, miscellaneous goods and services posted the largest annual average increase at 17.61%, followed by education (7.04%), transportation (5.80%), and clothes and footwear (5.56%), whereas insurance and financial services edged down by 0.01%.
Geographically, inflation was highest in the Tarai region, which recorded an annual average rate of 3.28% in 2025/26. Next were Kathmandu Valley at 3.16%, the Hills at 2.81% and the Mountain region at 2.73%. In mid-July, inflation reached 5.63% in Tarai, 4.97% in the Hilly region, 4.08% in Kathmandu Valley and 4.04% in the Mountain region.
Annual average inflation was also higher in urban areas at 3.22% compared to 2.65% in rural areas. Inflation rates in urban and rural areas were recorded at 5.19% and 4.99%, respectively, in mid-July.
Among the provinces, Madhesh recorded the highest year-on-year inflation rate at 5.94% in mid-July, followed closely by Koshi at 5.61% and Lumbini at 5.25%. Gandaki, Karnali, and Bagmati posted inflation figures of 5.12%, 5.01%, and 4.68%, respectively, while Sudurpashchim registered the lowest inflation among provinces at 4.27% in mid-July.
