Inflation at 14.4 percent, up from last month: NRB

ekantipur, 6-Feb-09

While the world is witnessing decline in inflation rates, prices continue to rise in Nepal. Although Nepal Oil Corporation (NOC), the sole importer of petroleum products in the country, is cutting down the petroleum prices and the prices of construction materials has gone down, the inflation is rising in the country.

Nepal Rastra Bank (NRB) said in its latest report on inflation on Friday that the country witnessed inflation of 14.4 percent in the period mid-December to mid-January up from 14.1 percent in mid-November to mid-December.

The consumer price index had actually gone down during mid-November to mid-December from 14.5 percent in the earlier month. It was expected that the trend would continue but it has been found otherwise now.

The inflation was at just 5.8 percent during mid-December to mid-January last year. The NRB report has however presented a unique picture of inflation that the wholesale price index was higher than consumer price index in mid-December to mid-January.

The wholesale price index rose by 14.7 percent against 14.4 percent of consumer price index. Generally, wholesale price index remains low compared to consumer price index as many costs are added in consumer prices.

The NRB has said that the inflation witnessed a rise this year as the price food and beverage category saw increase in their prices by 18.3 percent and non-food and service category witnessed 10.3 percent rise in prices against 7.3 percent and 4.2 percent respectively last year.

Amongst the products in the food and beverage group, sugar products witnessed the highest price rise by 37.3 percent. The prices of sugar products had declined by 14.2 percent last year.

Likewise, cooking oil, fish, meat, eggs and restaurant foods also saw higher price rises this year against last year. Non-food items also saw huge price rises by 20.7 percent in the sixth month of the current fiscal year. This group had witnessed price rise by just 7.5 percent last year.

According to the NRB report, Kathmandu valley saw the highest price rise at 15.8 percent during mid-December to mid-January period. The hilly region saw increase in inflation by 14.2 percent whereas Terai saw it gone up by 13.6 percent.

In a recent survey of the World Food Programme conducted in coordination with government and private sectors also reveled the interesting fact that inflation higher in Kathmandu than that witnessed in Rolpa and Salyan which have a difficult terrain.