National CPI Rises 1.68%: Kathmandu and Mountain Regions Lead Inflation Trend

The mid-month CPI for July–August 2025/26 shows that Nepal’s overall inflation rose by 1.68% year-on-year, with the national index climbing from 103.22 last year to 104.96. On a monthly basis, inflation increased by 0.39% compared to June–July 2025, signaling that cost pressures remain present across the economy.

A closer look at the ecological belts reveals strong regional contrasts. Kathmandu Valley recorded 2.26% inflation, as food prices fell by -2.10% but non-food and services surged 3.95%. This reflects rising costs of housing, utilities, education, and healthcare, making services the key inflation driver in the capital.

The Mountain region faced the highest price pressure among all belts, at 2.59%, despite food costs falling by -1.15%. Non-food and services soared by 5.06%, the steepest rise nationwide, highlighting the burden of logistics, transport, and service expenses in remote areas.

In contrast, the Terai region reported the lowest inflation at 1.33%, where food costs declined by -3.03%, but non-food inflation rose 4.17%. The Hill region posted 1.56% inflation, with food easing -1.51% and non-food rising 3.31%.

Nepal’s inflation pattern shows a clear divergence: food prices are falling across the country, softening household grocery expenses, but non-food and service costs are surging, driving overall inflation higher. The trend is most pronounced in Kathmandu Valley and the Mountain belt, where services are reshaping the inflation landscape.