Nepal inflation rises to 5.96 percent in first month of fiscal year

Nepal’s consumer price inflation rose to 5.96 percent in Shrawan, the first month of the current fiscal year, marking its highest level in approximately 18 months. This represents a significant increase from the 1.68 percent inflation rate recorded during the same period last year.

Inflation within the food and beverage group reached 6.77 percent, driven by sharp increases in the prices of ghee and oil (15.62 percent), fruits (15.39 percent), meat and fish (8.65 percent), vegetables (6.90 percent), and spices (4.80 percent). In the non-food and services category, inflation stood at 5.52 percent, with transportation costs rising by 13.17 percent.

Regional data shows Madhesh Province experienced the highest inflation at 6.94 percent, while Sudurpashchim Province recorded the lowest at 4.61 percent. Rural inflation was slightly higher at 6.18 percent compared to 5.88 percent in urban areas.

Despite rising domestic prices, Nepal’s external economic sector has strengthened. Driven by rising remittances and a high current account surplus, foreign exchange reserves have reached US$25.84 billion, sufficient to cover 18.8 months of imports.