The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
Nepal’s inflation has dropped sharply from 7.74% in 2022/23 to 1.68% in 2025/26, while India’s has remained more stable around 2%. The shift reflects Nepal’s falling food prices versus India’s agricultural price pressures, but both countries still face service-driven inflation risks.
In August 2025/26, Nepal’s CPI stood at 1.68%, lower than India’s 2.07%, with the inflation deviation dropping to -0.39% for the first time in four years. While Nepal gained from falling food prices, India’s inflation stayed higher due to agricultural pressures, though both countries continue to face rising service costs.
In August 2025/26, Nepal recorded 1.68% inflation, falling below India’s 2.07% for the first time in four years. Nepal benefitted from falling food prices, while India faced agricultural price pressures. However, Nepal’s non-food service inflation remains a concern, even as headline CPI eases.
Nepal and India’s inflation trends usually move in sync, reflecting shared regional and global factors. But in August 2025/26, Nepal’s inflation (1.68%) fell below India’s (2.07%) for the first time in four years, thanks to easing food prices in Nepal, while India faced higher agricultural pressures.
In August 2025/26, Nepal’s inflation dropped to 1.68%, falling below India’s 2.07% for the first time in four years. While food price declines drove Nepal’s slowdown, India’s inflation held slightly higher due to agricultural pressures. However, Nepal’s service costs remain a long-term challenge, even as headline CPI looks favorable.
Nepal’s CPI growth slowed to 1.68% in 2025/26, easing food price pressures and providing relief to households. However, non-food and service costs remain high, reshaping household budgets and long-term inflation risks. For investors, this means opportunities in consumption-driven sectors but caution around service-heavy industries.
Nepal’s inflation slowed to 1.68% in August 2025/26, the lowest in four years, signaling progress in taming food-driven inflation. However, rising service costs remain the main challenge, meaning Nepal has eased short-term price pressures but still faces long-term structural inflation risks.
The sharpest price hikes in Nepal occur in October–December, peaking in November (5.60%) and December (6.05%), driven by festivals and winter shortages. By contrast, April–July sees the lowest inflation, supported by fresh harvests and stable supply conditions.
Nepal’s inflation moves in seasonal cycles—peaking in October–December during festivals and winter shortages, and easing in April–July with fresh harvests. While food costs cause sharp swings, services keep overall inflation elevated year-round, creating a mix of seasonal and structural pressures.
