Nepal’s year-on-year consumer price inflation (CPI) reached 5.41% in mid-January 2025, slightly up from 5.26% recorded a year ago, according to the Nepal Rastra Bank’s (NRB) latest report, Current Macroeconomic and Financial Situation of Nepal. The report, based on data from the first six months of the fiscal year 2024/25, highlights key economic indicators, including inflation trends, trade performance, and wage growth.
The food and beverage sector witnessed a 7.67% inflation rate, with vegetable prices surging by 28.52%, followed by ghee and oil (10.67%), pulses and legumes (9.48%), and cereal grains (7.23%). However, the spices sub-category saw a 3.12% price decline. Non-food and service inflation stood at 4.19%, with significant price increases in miscellaneous goods and services (9.35%), alcoholic drinks (7.01%), clothing and footwear (6.75%), and household equipment (5.29%).
Geographically, rural areas experienced a higher inflation rate of 5.68% compared to 5.31% in urban areas. Among provinces, Koshi reported the highest inflation at 6.73%, while Gandaki saw the lowest at 4.37%.
Wholesale price inflation (WPI) increased to 4.01% from 3.36% a year ago, with consumption goods witnessing the highest rise (6.92%). However, construction material prices fell by 4.28% in the review period.
The salary and wage index grew by 2.85% in the second quarter of the fiscal year, a slowdown from 5.56% a year ago. Regionally, Sudurpashchim saw the highest wage increase (7.59%), while Koshi recorded the lowest (1.30%).
Nepal’s merchandise exports grew by 31.8% to Rs. 98.79 billion in the first six months of 2024/25, reversing last year’s 7.2% decline. Exports to India surged by 46.1%, while exports to China and other countries rose by 19.7% and 1%, respectively. Key export items such as soybean oil, tea, polyester yarn, and cardamom saw increased demand, whereas palm oil, zinc sheets, and readymade garments experienced a downturn.
Imports also rose by 7.1% to Rs. 822.37 billion, led by increased imports of crude soybean oil, transport equipment, and edible oil, while petroleum products, gold, and chemical fertilizers saw a decline. The trade deficit widened by 4.4% to Rs. 723.58 billion, reflecting a growing gap between imports and exports.
Despite these economic fluctuations, the export-import ratio improved to 12% from 9.8% a year ago, indicating a gradual strengthening of Nepal’s export sector. However, rising inflation and an expanding trade deficit continue to pose challenges for economic stability.
03rd Feb 2025
Comments