Inflation down to single digit in 15 months

27, Oct 2009
After staying at double digits for 15 months, inflation has slipped to single digit. The latest statistics of the Nepal Rastra Bank (NRB) show that inflation in mid-September stood at 9.7 percent. Consumer inflation remained at double digit throughout the last fiscal year. However, after reaching the high of 14.4 percent in January 2009, inflation has started to moderate slightly in the past few months. It was at 10.4 in mid-August. The current monetary policy has projected an inflation target of 7 percent for the current fiscal year.
The ease in inflation is due to drop in the prices of non-food items and services only. NRB data shows the index of non-food and services group rose only by 2.1 percent. However, the price of food and beverages has continued to go up. According to 2nd month price analysis of the NRB, the price index of food and beverages group has increased by 16.3 percent during the period. Despite the inflation coming down to single digit, the price rise of vegetable and fruits has affected the general consumers. The price index of vegetables and fruits has increased by whopping 43.5 percent during the review period. Last year, it had declined by 14.6 percent.
The price of sugar and sugar related products has also continued to rise. Same is the case with meat, fish and eggs as well as pulses. The price of meat, fish, eggs and pulses sub-groups has increased by 29 percent and 25.6 percent, respectively, compared to a corresponding rise of 14.5 percent and 23.7 percent in the same period last year. The index of the grains and cereal products sub-group also witnessed an increment of 5.8 percent compared to 23.8 percent increase in the same period of the previous year.
Among the non-food and services group, the price of tobacco and related products rose up by 17.0 percent compared to a rise of 12.7 percent during the same period last year. But the price index of transport and communication has declined by 8.7 percent against an increase of 23.1 percent during the same period last year. NRB data shows that the consumers of Tarai suffered the most due to price rise followed by consumers of Kathmandu valley. As per central bank's statistics, the price index of Tarai increased by 9.9 percent and of Kathmandu increased by 9.6 percent.
However, wholesale price inflation increased to 12.6 percent in the review period. The price of agricultural commodities and domestic manufactured commodities has increased by 29.7 percent and 4.6 percent, respectively in the review period as compared to 0.7 percent and 15.8 percent a year ago.
Source: ekantipur.com