Wholesale Price Index 2082/83: Signals for Future Inflation

Published on September 24, 2025

The Wholesale Price Index (WPI) is a leading indicator for inflation trends because it tracks changes in prices at the wholesale or producer level before they are transmitted to consumers. Nepal’s WPI has shown a marked cooling over the past few years. After peaking at 12.74% in FY 2021/22 due to global commodity shocks and supply chain disruptions, it slowed to 4.98% in FY 2022/23, further to 4.41% in FY 2023/24, and dropped to just 1.05% in FY 2024/25. By mid-August 2082/83 (2025/26), WPI inflation stood at 2.37%, signaling subdued wholesale price pressures.

This downward shift has important implications for future inflation. Since wholesale prices are a precursor to retail prices, the moderation suggests that consumer inflation is likely to remain contained in the short term, aligning with the cooling CPI trend (1.68% as of mid-August 2082/83). Stable global oil prices, improved foreign exchange reserves, and easing import costs have contributed to this trend. For households, this means the risk of a sudden spike in consumer prices has diminished, at least in the near future.

However, the signals are mixed when viewed alongside sectoral price trends. While food prices at wholesale and retail levels have entered negative territory, non-food components—particularly energy, transport, and housing—remain under upward pressure. This indicates that while overall inflation may remain subdued, household costs in essential non-food categories will not ease as quickly. Furthermore, very low wholesale inflation can also reflect weak demand in the economy, suggesting businesses face challenges in raising prices due to slow consumption.

For policymakers and investors, the WPI signals a window of price stability that could be leveraged to stimulate investment and credit growth. Lower wholesale inflation reduces input cost pressures for manufacturers and traders, potentially encouraging production. Yet, unless this translates into stronger domestic demand and higher fixed capital formation, subdued wholesale prices might also mirror underlying economic sluggishness.

Policy Lessons from India: Can Nepal Control Inflation More Effectively?

India has kept inflation relatively moderate through strong agricultural systems, buffer stocks, and inflation-targeting policies, while Nepal has historically struggled with food-driven volatility. Nepal’s CPI fell below India’s in 2025/26 for the first time in four years, but to sustain this trend, Nepal must strengthen supply chains, adopt buffer policies, and set clearer inflation targets.

Inflation Convergence in South Asia: What Nepal-India CPI Data Reveals

Nepal and India’s inflation rates, once far apart, have gradually converged—Nepal’s CPI dropping from 7.74% in 2022/23 to 1.68% in 2025/26, while India’s remained steadier around 2–5%. For the first time in four years, Nepal’s inflation fell below India’s, highlighting both shared regional cycles and unique domestic vulnerabilities.

Nepal vs India: Monthly CPI Comparison and Regional Economic Impact

Nepal’s inflation fell to 1.68% in August 2025/26, below India’s 2.07%, reversing a four-year trend. While both economies share similar seasonal inflation cycles, Nepal’s sharper food-driven spikes contrast with India’s steadier, monsoon-driven patterns. Regionally, this convergence impacts household costs, trade competitiveness, and economic stability.

Inflation Gap Narrows: Nepal’s Deviation with India Falls to -0.39% in 2025/26

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.

Cross-Border Inflation Trends: How Nepal and India’s Prices Move Together and Apart

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.

Nepal vs India Inflation 2025/26: Why Nepal’s CPI Fell Below India’s for the First Time

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.