Nepal's Inflation Remains Under Control as Food Prices Climb

Nepal's annual point-to-point consumer inflation reached 5.04 percent by mid-June of the current fiscal year, remaining within the Nepal Rastra Bank's policy target of 5.5 percent despite a noticeable rise in the prices of essential goods and services. According to the central bank's latest macroeconomic report covering the first 11 months of FY 2025/26 (2082/83 BS), inflation increased from 2.77 percent recorded during the same period last year. Non-food and services inflation stood at 5.26 percent, exceeding food and beverage inflation, which was recorded at 4.63 percent. Among food items, fruit prices rose the most by 18.60 percent, followed by edible oils and ghee at 13.99 percent, while vegetable prices increased by 5.40 percent and meat and fish by 4.16 percent. In contrast, prices of pulses fell by 1.67 percent and spices declined by 0.65 percent. In the non-food category, miscellaneous goods and services recorded the highest inflation at 19.90 percent, while transport costs surged 15.30 percent due to higher fuel and logistics expenses. Education prices increased by 5.54 percent and clothing and footwear by 4.73 percent. Regionally, urban inflation reached 5.29 percent compared to 4.35 percent in rural areas, with Koshi Province recording the highest inflation at 5.64 percent. Despite the recent increase, the average inflation rate during the first 11 months of the fiscal year remained at just 2.66 percent, significantly lower than the 4.39 percent average recorded during the same period last year, indicating that overall price stability has largely been maintained despite rising costs in selected sectors.