Kathmandu: Nepal’s inflation fell to below 3 percent in mid-March as food prices saw negative growth and prices of non-food items also moderated compared to the same time last year, Nepal’s central bank said on Sunday.
Inflation remained 2.9 percent in mid-March this fiscal year that started in mid-July 2016. The figure was much lower than the 10.2 percent at the same time last fiscal when the country was trying to emerge from supply disruption caused allegedly by India, according to Nepal Rastra Bank (NRB)’s monthly “Current Macroeconomic and Financial Situation Report” released on Sunday.
Nepal faced blockade for four and half months until first week of February 2016 in the last fiscal year. The inflation has been decelerating in recent months due mainly to the previous year’s base price effect and improved supply situation. Mid-March witnessed the lowest price of this fiscal year.
“We had expected negative inflation this year from the high inflation rate last year when the country faced unusual situation of blockade,” said Nara Bahadur Thapa, chief of research department at NRB. “But, people are experiencing continuously higher prices of goods this year despite subdued growth in inflation,” he said.
According to NRB, food inflation remained negative by 0.4 percent in mid-March this year against 10.3 percent at the same time last year. Prices of pulse and legumes, vegetables and cereal products decreased bringing down inflation of food items.
On the other hand, inflation of non-food items also moderated to 5.6 percent in the review period this year against 10.2 percent in the same time last year. The decline in growth rate of the prices of clothes and footwear, communication, housing and utilities, transportation among others brought down the inflation of the sector, according to the Nepalese central bank.