Inflation hits 13.5 percent

Inflation hits 13.5 percent
ekantipur, 3-Nov-08

Driven by a significant rise in the prices of foods and beverages as well as non-food items and services, inflation based on consumer price index rose to 13.5 percent in mid-September 2008 from 7 percent recorded last year.

Nepal Rastra Bank (NRB), the central bank, said in a statement that food and beverage prices swelled to a whopping 14.2 percent from 10.9 percent in the review period.

The price rise in the non-food and service group was recorded at 12.8 percent compared to 2.8 percent a year earlier. Core inflation rose to 12.1 percent from 5.4 percent previously. However, NRB said inflation according to the wholesale price index softened to 10.3 percent in mid-September compared to 11.1 percent a year earlier.

“The moderation was due mainly to a decline in the prices of cash crops, fruits and vegetables under the agricultural commodities group in spite of an increase in the rates of imported commodities,” the bank added in the statement.

Prices of agricultural commodities and manufactured goods increased by 0.7 percent and 15.8 percent respectively compared to 16.6 percent and 7.8 percent.

The bank also said the overall salary and wage rate index soared by 9.2 percent in mid-September compared to a rise of 12.5 percent a year ago. Regarding salary and wage rate indices, the salary index remained unchanged in the review period compared to a rise of 10.9 percent in the corresponding period last year. The wage rate index went up by 12.3 percent compared to 13.1 percent recorded last year.

Wages of agricultural, industrial and construction labourers shot up by 19.5 percent, 2.7 percent and 8.9 percent respectively in the review period. The increment in wage rates last year was recorded at 9.1 percent, 19.4 percent and 13.2 percent respectively.