From Spices to Transport: Detailed CPI Analysis for Nepal 2025/26

Nepal’s Consumer Price Index (CPI) for the first month of FY 2025/26 paints a diverse picture of inflation trends across food and non-food sectors. The overall CPI stood at 104.96, showing a 1.68% increase compared to July–August 2024/25 and a 4.09% rise compared to three years ago. While the month-on-month rise was just 0.39%, the underlying breakdown reveals both sharp declines in certain essentials and steady rises in structural services.

In the Food and Beverages group (35.49% weight), households saw significant price swings. Vegetables recorded a steep fall of -18.56% year-on-year, providing relief to consumers, along with declines in spices (-4.81%) and meat & fish (-2.41%). However, this relief was offset by increases in other staples: ghee and oil surged by 10.97%, fruit rose 3.01%, and milk and eggs increased 1.83%. Cereals, despite a minor yearly dip of -0.87%, still show long-term cost pressure, up 9.15% over three years, highlighting persistent inflation in core food items.

The Non-food and Services group (64.51% weight) showed more consistent inflationary pressure, with a 3.95% year-on-year rise. The strongest contributors were education (+7.67%), clothes and footwear (+6.84%), and miscellaneous goods and services (+10.60%), all of which have a direct impact on household budgets. Transportation rose 3.94%, reflecting fuel adjustments and mobility costs, while housing and utilities (+1.02%), health (+2.98%), and communication (+2.69%) recorded moderate increases. Interestingly, insurance and financial services fell slightly (-0.22%), and restaurants, culture, and recreation remained relatively stable, preventing sharper overall inflation.

This combination shows that while short-term food relief from cheaper vegetables and spices is cushioning households, structural non-food inflation—driven by education, clothing, and transport—is keeping overall living costs elevated. The contrast underscores a shift in inflationary pressure from volatile food categories toward sticky service costs, which are harder for families to adjust or substitute.