Inflation Eases to 1.68% in Shrawan as Food Prices Decline

Kathmandu, August — Nepal’s consumer inflation in the first month of FY 2082/83 dropped sharply to 1.68 percent, compared to 4.09 percent in the same month last year. According to Nepal Rastra Bank, the significant drop in food prices was the main driver behind this sharp fall in overall inflation, bringing some relief to consumers.

Food Prices Drag Inflation Down

In Shrawan, the food and beverage group recorded a negative inflation of -2.28 percent, a stark reversal from last year’s 6.17 percent increase. In contrast, the non-food and services group inflation rose to 3.95 percent, higher than last year’s 2.94 percent. This divergence shows that while food costs are falling, non-food expenses are putting mild upward pressure on household budgets.

Vegetables Cheaper, Oil More Expensive

Within the food category, some items became much cheaper while others grew costlier. Prices of ghee and oil rose by 10.97 percent, non-alcoholic beverages by 4.64 percent, and fruits by 3.01 percent. On the other hand, vegetable prices plunged by 18.56 percent, spices dropped by 4.81 percent, and meat and fish became cheaper by 2.41 percent. The steep fall in vegetable prices played the biggest role in keeping food inflation negative.

Education and Miscellaneous Goods Drive Non-Food Inflation

Most non-food sub-groups experienced inflation. Miscellaneous goods and services topped the list with a 10.60 percent increase, followed by education at 7.67 percent, clothing and footwear at 6.84 percent, furnishing and household goods at 5.06 percent, and tobacco products at 4.68 percent. Only one subgroup, insurance and financial services, saw a marginal decline of 0.22 percent, offering a small counterbalance.

Rural and Urban Inflation Almost Alike

Inflation stood at 1.65 percent in rural areas and 1.70 percent in urban areas, indicating that the trend of low price growth was consistent across the country.

Provincial Breakdown

Among provinces, Koshi recorded the highest inflation at 2.84 percent, followed by Madhesh at 1.86 percent, Karnali at 1.79 percent, Bagmati at 1.67 percent, Lumbini at 1.35 percent, and Gandaki at 1.03 percent. Sudurpaschim province saw the lowest inflation at just 0.31 percent, suggesting almost no price pressures in the far-western region.

Geographical Differences

Geographically, Kathmandu Valley experienced inflation of 2.26 percent, while the Mountain region was highest at 2.59 percent. In contrast, inflation in the Hill region stood at 1.56 percent, and the Terai recorded the lowest at 1.33 percent.

Economists attribute the sharp fall in inflation mainly to improved supply conditions, timely rainfall, and better agricultural output, which reduced food prices. For consumers, lower inflation means reduced household expenses and improved purchasing power.

However, experts caution that ultra-low inflation could also signal weak demand or falling farm-gate prices, which may hurt farmers’ incomes. With non-food inflation rising moderately, the overall outlook remains mixed. Policymakers are expected to closely monitor food supply, import trends, and regional disparities to ensure that low inflation translates into sustainable economic stability.