Inflation moderates slightly to 7.41%

KATHMANDU: The year-on-year consumer price inflation in mid-May 2023 remained steady at 7.41%, compared to 7.87% recorded a year earlier.

According to the Current Macroeconomic and Financial Situation of Nepal, based on data of the first 10 months of the fiscal year 2022/23, food and beverage inflation stood at 5.54%, while non-food and service inflation increased to 8.89% during the review month.

Within the food and beverage category, the year-on-year price index for various sub-categories witnessed notable changes. Spices saw a significant increase of 26.61%, followed by restaurant and hotel prices rising by 14.87%. Cereal grains and their products experienced a surge of 13.69%, while milk products and eggs saw an increase of 10.41%. Tobacco products also registered a rise of 8.49%.

In the non-food and services category, the year-on-year price index for different sub-categories displayed varying trends. The sub-category of recreation and culture observed a significant increase of 15.75%, followed by miscellaneous goods and services which grew by 13.08%. Education costs increased by 10.56%, while housing and utilities experienced a growth of 9.65% , and furnishing and household equipment prices went up by 8.27%.

Consumer price inflation in different regions of Nepal also exhibited diverse patterns. In the review month, inflation in the Kathmandu Valley reached 7.68%, while the Terai, Hill, and Mountain regions recorded inflation rates of 7.15%, 7.57%, and 7.12%, respectively. Comparatively, a year ago, the inflation rates were 7.39%, 8.15%, 7.89%, and 8.21%, respectively, for these regions.

Wholesale price inflation saw a noticeable decrease, with the year-on-year wholesale price inflation standing at 3.31% during the review month, in contrast to 16.06% recorded a year earlier. The wholesale price of intermediate goods and capital goods witnessed increases of 7.04% and 4.33%, respectively. However, the wholesale price of consumption goods experienced a decline of 3.12%. Wholesale inflation of construction materials stood at 2.68% during the review month.

The year-on-year salary and wage rate index witnessed a growth of 7.64% during the review month, showing a slight decline from the 8.52% growth rate recorded a year ago. The salary index increased by 12.39%, while the wage rate index went up by 6.29%.