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#NepalWPI #IntermediateGoods #
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By Sandeep Chaudhary

Intermediate Goods Inflation Softens to 1.14% as Industrial Inputs Stabilize

Intermediate Goods Inflation Softens to 1.14% as Industrial Inputs Stabilize

The Wholesale Price Index (WPI) for July–August 2025/26 shows that intermediate goods (56.30% weight)registered a modest 1.14% year-on-year increase, down from stronger gains in earlier periods. This softening reflects a stabilization in key industrial inputs such as chemicals, plastics, and processed raw materials, which form the backbone of Nepal’s manufacturing and production sectors.

The moderation is significant because intermediate goods account for the largest share of the WPI basket, meaning their stability plays a crucial role in easing overall inflationary pressures. Categories like chemicals (+0.73%), rubber and plastics (+1.79%), and machinery inputs (+1.13%) posted only slight increases, suggesting that supply chains are stabilizing after recent global disruptions. Similarly, non-metallic minerals, though highly volatile in previous years, posted only a modest 0.79% rise year-on-year, after a strong rebound from last month’s lows.

For industries, this easing means lower input cost pressures, which could improve margins for manufacturers in textiles, food processing, construction, and transport equipment. It also reduces the risk of wholesale inflation feeding into consumer-level price hikes, especially in retail goods. However, the relatively stable movement also reflects weak industrial demand, signaling that while costs are under control, industrial expansion and investment momentum remain limited.

Overall, the softening of intermediate goods inflation shows that Nepal’s wholesale inflation is now being driven more by consumption goods (+3.89%) and construction materials (+4.08%) rather than industrial inputs, shifting the pressure points in the economy.

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