NRB: Y-o-Y Consumer Price Inflation surges in Ktm Valley and Mountain region

Nepal Views

Kathmandu: The Nepal Rastra Bank (NRB) has disclosed the increment in inflation in various regions of Nepal.

The year-on-year (y-o-y) consumer price inflation in the Kathmandu Valley, Terai, Hill, and Mountain region surged to 10.23 percent, 5.66 percent, 7.38 percent, and 10.24 percent respectively, the NRB stated in its Current Macroeconomic and Financial Situation of Nepal Report based on three months data ending Mid-October, 2023/24.

Inflation in these regions was 6.93 percent, 9.42 percent, 8.84 percent, and 7.07 percent respectively a year ago. The Central Bank stated that the y-o-y consumer price inflation stood at 7.50 percent in mid-October 2023 compared to 8.50 percent a year ago. Food and beverage category inflation stood at 8.38 percent whereas non-food and service category inflation stood at 6.81 percent in the review month.

Under the Food and Beverage Category, the y-o-y consumer price index of the spices sub-category increased 37.63 percent, sugar, and sugar products 18.22 percent, fruit 14.02 percent, cereal grains & their products 12.23 percent, and milk products and eggs 11.92 percent.

The y-o-y consumer price index of the ghee & oil subcategory decreased 11.61 percent in the review month. Under the Non-Food and Services Category, the y-o-y consumer price index of the recreation and culture subcategory increased by 15.55 percent, miscellaneous goods and services by 12.11 percent, education by 9.10 percent, housing, and utilities by 8.08 percent and furnishing and household equipment by 6.25 percent.

The y-o-y consumer price index of the transportation sub-category decreased by 1.62 percent in the review month. Wholesale Price Inflation (WPI) The y-o-y wholesale price inflation stood at 2.78 percent in mid-October 2023 compared to 13.73 percent a year ago.

The y-o-y wholesale price index of consumption goods, intermediate goods, and capital goods increased 5.30 percent, 1.32 percent, and 2.97 percent respectively. The y-o-y wholesale price of construction materials decreased by 0.34 percent in the review month.

Salary and Wage Rate Index (SWRI) The y-o-y salary and wage rate index increased 5.65 percent in mid-October 2023 compared to 11.59 percent a year ago. The y-o-y Salary index and Wage rate index increased by 1.05 and 7.05 percent respectively in the review month.

Merchandise exports decrease During the review period, merchandise exports decreased 2.3 percent to Rs.40.87 billion compared to a decrease of 35.7 percent in the same period of the previous year. Destination-wise, exports to India decreased by 9.4 percent whereas exports to China and other countries increased by 345.9 percent and 9.5 percent respectively.

Exports of zinc sheet, particle board, juice, cardamom, polyester yarn & thread, among others increased whereas exports of palm oil, soyabean oil, jute goods, woolen carpet, and rosin, among others decreased. In the review period, merchandise imports increased 1.7 percent to Rs.407.76 billion compared to a decrease of 16.2 percent a year ago.

Destination-wise, imports from India and China increased by 2.4 percent and 42.4 percent respectively while imports from other countries decreased by 22.8 percent. Imports of readymade garments, M.S. wire rods, bars, and coils, chemical fertilizer, electrical equipment, and textiles, among others, increased whereas imports of crude soyabean oil, crude palm oil, petroleum products, gold, M.S. billet, among others decreased.

Based on customs points, exports from Bhairahawa, Dry Port, Jaleswor, Krishnanagar, Mechi, Nepalgunj, Rasuwa and Tribhuwan Airport Customs Offices increased whereas exports from all the other major customs points decreased in the review period. On the import side, imports from Bhairahawa, Dry Port, Jaleshwor, Kanchanpur, Nepalgunj, Rasuwa, and Tatopani Customs Offices increased whereas imports from all the other major customs points decreased in the review period.

The total trade deficit increased by 2.1 percent to Rs.366.88 billion during the review period. Such a deficit had decreased by 13.1 percent in the corresponding period of the previous year. The export-import ratio decreased to 10.0 percent in the review period from 10.4 percent in the corresponding period of the previous year.

During the review period, merchandise imports from India against payment in convertible foreign currency amounted to Rs.45.58 billion. Such an amount was Rs.34.59 billion in the same period of the previous year. Composition of Foreign Trade As per the Broad Economic Categories (BEC), the intermediate and final consumption goods accounted for 55.2 percent and 44.5 percent of the total exports respectively, whereas the ratio of capital goods in total exports remained negligible at 0.3 percent in the review period.

In the same period of the previous year, the ratio of intermediate, capital, and final consumption goods remained at 57.0 percent, 0.03 percent, and 43.0 percent of total exports respectively. On the imports side, the share of intermediate goods remained at 50.6 percent, capital goods at 8.5 percent, and final consumption goods at 40.9 percent in the review period. Such ratios were 53.2 percent, 8.3 percent, and 38.5 percent respectively in the same period of the previous year.

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