Consumer price inflation drops to 4.1 pc in mid-August 2024: NRB

KATHMANDU: The year-on-year (y-o-y) consumer price inflation stood at 4.10% in mid-August 2024, down from 7.52% a year earlier, according to the macroeconomic and financial situation report released by Nepal Rastra Bank (NRB) on Thursday. 

Food and beverage inflation was recorded at 6.17%, while non-food and service inflation stood at 2.94% during the review month. In the same period last year, these indices had increased by 8.90% and 6.62%, respectively.

Within the food and beverage category, the y-o-y price index for vegetables rose by 19.07%, pulses and legumes by 12.09%, cereal grains and their products by 9.15%, and milk products and eggs by 3.66%. Conversely, the y-o-y price index for spices decreased by 2.75%.

In the non-food and services category, the y-o-y price index for miscellaneous goods and services increased by 7.94%, alcoholic drinks by 5.38%, clothes and footwear by 4.58%, and tobacco products by 3.52%. The price index for insurance and financial services remained unchanged.

During the review month, the y-o-y price index in rural areas increased by 4.28%, while in urban areas, it rose by 4.03%.

By province, y-o-y consumer price inflation in mid-August 2024 was as follows: Koshi Province at 4.61%, Madhesh Province at 4.17%, Bagmati Province at 3.49%, Gandaki Province at 3.90%, Lumbini Province at 3.81%, Karnali Province at 3.46%, and Sudurpashchim Province at 6.69%.

In the Kathmandu Valley, Tarai, Hill, and Mountain regions, y-o-y consumer price inflation surged to 3.62%, 4.49%, 3.67%, and 4.53%, respectively. A year ago, inflation in these regions was 8.50%, 6.70%, 7.50%, and 11.46%, respectively.

*Update of the base year of Consumer Price Index Nepal Rastra Bank has updated the base year of the Consumer Price Index (CPI) to 2023/24. Prior to this, such base year was 2014/15. 

The household expenditure weights used for this index are derived from the fourth Nepal Living Standards Survey (NLSS-IV), conducted by the National Statistics Office in the fiscal year 2022/23. In the updated Consumer Price Index, the weight for the food and beverage group is 35.49% and for the non-food and services group is 64.51%. Previously, alcoholic drinks, tobacco products, and restaurants and hotels were included in the food and beverages group. However, in the updated index, these items have been reclassified under the non-food and services group in accordance with the COICOP (Classification of Individual Consumption by Purpose) 2018 standard. 

Price of 525 items is collected from the weighted basket of 249 commodities to compute the price index. Of these, price of 59 items is collected weekly, 94 monthly, and 372 quarterly. The price index is computed at the provincial level as well. 

For price collection, 87 market centres have been selected across all 77 districts, including 28 from the Terai, 43 from the hill, and 16 from the mountain region. Among these, 21 are rural market centers and 66 are urban. These market centres on provincial basis consists of 15 in Koshi, 12 in Madhesh, 16 in Bagmati, 11 in Gandaki, 13 in Lumbini, and 10 each in Karnali and Sudurpashchim. 

The new series is based on the international standards such as Consumer Price Index Manual 2020 and COICOP 2018, among others.