Consumer Price Index by Ecological Regions: Moderate Inflation, Regional Variations

The latest Consumer Price Index (CPI) report for Nepal, based on its ecological regions, has highlighted the regional inflation disparities and their effects on consumer spending patterns. The CPI report for the base year 2023/24 presents inflation trends across the Kathmandu Valley, Terai, Hill, and Mountain regions, showing an overall annual price increase of 3.85% nationwide.

1. Overall CPI Trends:

   • The national CPI index rose from 99.94 last year to 103.79 in August/September this year, marking a moderate increase of 3.85%.

   • Regionally, the Kathmandu Valley saw a 3.49% increase, Terai 4.09%, Hills 3.61%, and Mountains 4.19%, indicating higher inflation in more remote areas.

2. Increase in Food and Beverage Sector:

   • Food prices have significantly increased across all regions, especially in the Mountain region, which saw an annual rise of 6.77%, attributed to transportation costs and supply chain challenges.

   • The Kathmandu Valley, Terai, and Hill regions saw food price increases of 4.28%, 4.99%, and 4.91%, respectively, reflecting regional disparities in food price inflation.

3. Stable Growth in Non-Food and Services Sector:

   • The non-food sector experienced stable growth, with increases of 3.19% in the Kathmandu Valley, 3.52% in Terai, 2.89% in the Hills, and 2.56% in the Mountain regions, suggesting some relief for consumers as non-food item prices remain steady.

4. Monthly Changes:

   • Monthly CPI changes showed only a 0.55% increase from July/August to August/September, indicating price stability.

   • Notably, the Mountain region saw a monthly decline of -0.13% in food prices, while the Kathmandu Valley showed a 1.40% monthly increase, reflecting higher urban demand.

The regional CPI report reveals moderate inflation across Nepal's ecological regions, with price increases particularly higher in remote areas. Continuous price rises in urban areas reflect changes in consumer spending patterns and lifestyle impacts. Targeted interventions and improved transportation could help bring economic balance.

The observed price increases across Nepal's ecological regions, particularly the higher costs in the Mountain region, highlight the challenges faced by remote areas. Although overall inflation remains moderate, targeted policies aimed at improving food availability and reducing transportation costs could help control the country's inflation rates.