Nepal’s CPI Growth Slows to 1.68% in 2025/26: What It Means for Consumers

The National Consumer Price Index (CPI) for mid-month July–August 2025/26 shows that Nepal’s inflation growth has slowed significantly compared to the past three years. The CPI rose by 1.68% year-on-year, with the index reaching 104.96, up from 103.22 in the same month of 2024/25. This is a sharp moderation compared to the previous years, when inflation grew 4.09% in 2024/25, 7.52% in 2023/24, and 8.26% in 2022/23.

The historical trend highlights a steady cooling of inflation. Between 2022/23 and 2023/24, average inflation stood at 7.74%, but this dropped to 5.44% in 2023/24 and further to 4.06% in 2024/25. Now, in the first month of 2025/26, the figure has fallen to 1.68%, marking the lowest growth rate in recent years. This indicates that price pressures are easing across the economy, largely due to declining food inflation and stable global commodity markets.

For consumers, this slowdown means relief in day-to-day living costs, especially in essential food items such as cereals, vegetables, and pulses that previously fueled inflation. However, while food costs are stabilizing or declining, non-food and service expenses—like housing, utilities, education, and healthcare—remain on an upward trajectory, as seen in the ecological belt breakdown. This creates a mixed situation: grocery bills may be easing, but the cost of services is still squeezing household budgets.

From a policy perspective, the sharp slowdown in CPI growth reflects the impact of monetary tightening by Nepal Rastra Bank, improving agricultural supply conditions, and relatively stable import prices. Yet, the challenge lies in ensuring that slowing inflation does not also signal weak domestic demand, which could slow down overall economic activity.