Inflation moderates to 2.77%

KATHMANDU: Consumer price inflation eased to 2.77% year-on-year (y-o-y) in mid-May, down significantly from 4.40% in the same period last year, according to the latest data from Nepal Rastra Bank (NRB).

The central bank has attributed the decline in inflation to subdued food prices and moderate non-food inflation.

According to the report, food and beverage inflation dropped sharply to 1.52%, compared to 6.41% a year ago. Non-food and services inflation edged up slightly to 3.45%, from 3.09% in the corresponding period last year.

Within the food and beverage category, prices of ghee and oil surged 11.08%, while fruits rose by 6.15%. Prices of pulses and legumes climbed by 5.17%, and non-alcoholic drinks by 4.70%. In contrast, vegetable prices dropped significantly by 8.11%, spices became cheaper by 2.20%, while the meat and fish sub-category recorded a slight decline of 0.48%.

In the non-food and services category, the price index of miscellaneous goods and services rose by 9.04%. Education costs increased by 5.88%, while clothing and footwear became 5.23% more expensive. The price of furnishing and household equipment rose by 3.99%, and restaurant and accommodation services by 3.16%.

Koshi sees the highest inflation
Consumer price index rose by 3.21% in rural areas, while it saw a slower 2.61% growth in urban areas.

Province-wise, Koshi Province recorded the highest inflation at 4.29%, followed by Sudurpashchim (3.14%), Madhesh (2.81%), Bagmati (2.40%), Gandaki (2.23%), Karnali (2.21%) and Lumbini (2.15%).

Similarly, the mountain region experienced the highest inflation at 4.01%. Kathmandu Valley, Tarai and hilly regions stood at 2.64%, 2.64% and 2.65%, respectively.

The wholesale price index (WPI) also moderated, standing at 3.95% in mid-May 2025 compared to 5.68% a year ago.