Bagmati Province Inflation Rises 3.33%: Kathmandu Valley Leads With 3.95% Hike

Bagmati Province, which carries the highest weight in Nepal’s CPI basket at nearly 31%, has recorded an overall inflation rate of 1.67% year-on-year. While this seems moderate, the deeper breakdown shows that non-food and services inflation surged by 3.33%, significantly outpacing food inflation, which actually declined by -2.05%. This highlights that households are spending more on education, housing, clothing, and utilities rather than on food items.

The most striking trend comes from the Kathmandu Valley, where overall inflation reached 2.26%, with non-food prices rising sharply by 3.95%. This makes the Valley the biggest driver of Bagmati’s inflation, reflecting higher living costs in urban centers, particularly due to education, rent, and service-sector expenses. Meanwhile, rural Bagmati recorded a modest 0.24% overall inflation, with food prices even declining by -1.21%. Outside the Valley, urban Bagmati (excluding Kathmandu) saw a lower 2.72% non-food inflation, showing that price pressures are far more intense in the capital region compared to surrounding areas.

This divergence reflects structural cost differences: Kathmandu Valley households are facing faster-growing expenses in non-food services, while rural and semi-urban households are somewhat shielded due to lower housing and service costs. Still, with Bagmati being Nepal’s economic hub, its 3.33% rise in non-food inflation directly pulls up the national average and signals broader urban cost-of-living challenges.