Spike in food price has pushed inflation up to an almost three-year-high of 6.95 per cent in the first month of the current fiscal year, the first time since September 2016. During the same month of the last fiscal year, inflation stood at 4.19 per cent only.
The government has set a target of containing the inflation at 6 per cent in the current fiscal year but the rising food price has made the government target seem impossible.
Earlier, the annual inflation stood at below five per cent in the fiscal years 2016-17, 2017-18 and 2018-19, due to stable food prices but since June, inflation has once again started to spiral upwards.
In mid-June, inflation shot up to 6.2 per cent and stood at six per cent in mid-July.
Consumer prices are lately going up due to a jump in prices of food items, according to the central bank. “Prices of vegetables shot up by 23.38 per cent in mid-August compared to the same month a year ago,” according to the Current Macroeconomic and Financial Situation report of the first month of the current fiscal year published by the central bank. “In mid-August, prices of fruits and spices also increased by 20.2 per cent and 13.2 per cent, respectively, compared to the same month of the last fiscal year.”
Overall, food prices, which contribute 43.9 per cent to the inflation basket, increased by 8 per cent in the first month, it reads.
According to the central bank, prices of vegetables, fruits, spices, meat and fish spiked in the review month. “Among the nonfood and service groups, prices of items in housing and utilities, clothes and footwear, and education sub-groups rose significantly.”
The jump in salary and wage rate index has also fueled price rise in the market as the year-on-year salary and wage rate index increased to 13.44 per cent in mid-August 2019 compared to 7.4 per cent a year ago, according to the central bank.
Though Nepal imports inflation with the food items from India, the Inflation stood at 3.2 per cent in India in August, which is 3.7 percentage points lower than in Nepal. The inflation difference between Nepal and India has largely been widening since June also due to lack of tighten market monitoring and government’s failure in discouraging middlemen from taking undue benefits. The market is flooded with the middlemen that take high profit margin due to lack of stringent market inspection.
The rising inflation will, however, hit the fixed wage earners as most of their income is spent buying food items.
But the traders have attributed the surge in inflation to pressure in the supply of essential goods, including food and vegetables, rise in labour cost and upward trend of consumer price in India.
The government has set a target of containing the inflation at 6 per cent in the current fiscal year but the rising food price has made the government target seem impossible.
Earlier, the annual inflation stood at below five per cent in the fiscal years 2016-17, 2017-18 and 2018-19, due to stable food prices but since June, inflation has once again started to spiral upwards.
In mid-June, inflation shot up to 6.2 per cent and stood at six per cent in mid-July.
Consumer prices are lately going up due to a jump in prices of food items, according to the central bank. “Prices of vegetables shot up by 23.38 per cent in mid-August compared to the same month a year ago,” according to the Current Macroeconomic and Financial Situation report of the first month of the current fiscal year published by the central bank. “In mid-August, prices of fruits and spices also increased by 20.2 per cent and 13.2 per cent, respectively, compared to the same month of the last fiscal year.”
Overall, food prices, which contribute 43.9 per cent to the inflation basket, increased by 8 per cent in the first month, it reads.
According to the central bank, prices of vegetables, fruits, spices, meat and fish spiked in the review month. “Among the nonfood and service groups, prices of items in housing and utilities, clothes and footwear, and education sub-groups rose significantly.”
The jump in salary and wage rate index has also fueled price rise in the market as the year-on-year salary and wage rate index increased to 13.44 per cent in mid-August 2019 compared to 7.4 per cent a year ago, according to the central bank.
Though Nepal imports inflation with the food items from India, the Inflation stood at 3.2 per cent in India in August, which is 3.7 percentage points lower than in Nepal. The inflation difference between Nepal and India has largely been widening since June also due to lack of tighten market monitoring and government’s failure in discouraging middlemen from taking undue benefits. The market is flooded with the middlemen that take high profit margin due to lack of stringent market inspection.
The rising inflation will, however, hit the fixed wage earners as most of their income is spent buying food items.
But the traders have attributed the surge in inflation to pressure in the supply of essential goods, including food and vegetables, rise in labour cost and upward trend of consumer price in India.
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