Inflation
·

By Sandeep Chaudhary

Nepal's Inflation Falls to 2.72% in Mid-June 2025, Lowest in Five Years

Nepal's Inflation Falls to 2.72% in Mid-June 2025, Lowest in Five Years

Nepal's consumer inflation rate has shown a significant decline, reaching a five-year low of 2.72% year-on-year (y-o-y)by mid-June 2025, according to data released by Nepal Rastra Bank. This marks a sharp drop from 4.17% recorded in mid-June 2024 and a substantial decrease from 3.57% observed in the annual average for FY 2023/24.

The broader trend over the past few years reveals a fluctuating inflation pattern. In FY 2019/20, the Consumer Price Index (CPI) stood at 4.78%, which slightly decreased to 4.19% in FY 2020/21. However, inflation surged to 8.08% in FY 2021/22—driven by post-pandemic supply chain disruptions and global commodity price shocks—before easing to 7.44% in FY 2022/23. The trend sharply reversed in FY 2023/24, with the annual CPI falling to 3.57%, suggesting a return to monetary stability.

The continued drop in inflation through mid-June 2025 signals a more stable macroeconomic environment. Factors contributing to this trend include improved domestic production, easing import costs due to stronger currency reserves, and tighter monetary policy by the central bank.

This low inflation figure is particularly important as it provides relief to households facing high living costs in previous years and supports purchasing power recovery. However, policymakers must remain cautious to ensure inflation remains within a healthy range that supports both consumer welfare and sustainable economic growth.

Related Blogs

Debate Intensifies Over Issuance of New Banking Licenses in Nepal
Top

3 min read

Debate Intensifies Over Issuance of New Banking Licenses in Nepal

Debate Intensifies Over Issuance of New Banking Licenses in Nepal In recent weeks, the topic of issuing new banking licenses has become a matter of national debate in Nepal’s financial and political spheres. Discussions were triggered following indications that Nepal Rastra Bank (NRB) might open up applications for new banking institutions. This has raised critical questions about whether Nepal's current banking ecosystem actually requires more financial institutions or if the focus should remain on strengthening and optimizing existing ones.

Dipesh Ghimire

·

14 Jul, 2025

Imports from China See Double-Digit Growth Across Key Sectors
Imports from China

2 min read

Imports from China See Double-Digit Growth Across Key Sectors

In the first eleven months of fiscal year 2024/25, Nepal’s imports from China rose by 15.3%, reaching Rs. 314.58 billion. Major commodities alone accounted for Rs. 208.19 billion, growing by 17.5%. Significant increases were seen in items like garlic (up 253%), steel rods and sheets (up 229.8%), solar panels (138.5%), and PVC compounds (153.4%), reflecting strong demand in food, construction, and energy sectors. Consumer goods such as cosmetics, garments, and computers also saw notable growth, while imports of items like smart cards, furniture, and writing paper declined sharply. This trend underscores Nepal’s continued dependency on Chinese goods, particularly for industrial materials, electronics, and daily-use products.

Sandeep Chaudhary

·

9 Jul, 2025

mports of Major Commodities from India Rise by 7.6% Despite Petroleum Decline
Import India

1 min read

mports of Major Commodities from India Rise by 7.6% Despite Petroleum Decline

Despite a few key declines, notably in petroleum and steel, Nepal’s overall import trajectory from India reflects a recovering and diversifying economy. The growth in industrial inputs, agriculture-related imports, and consumer durables signals rising domestic activity and future infrastructure expansion. With the total imports from India reaching Rs. 977.13 billion in eleven months, India continues to remain Nepal’s dominant trade partner. Policymakers may need to monitor the rising trade imbalance as domestic production remains insufficient to offset the growing import bill.

Sandeep Chaudhary

·

9 Jul, 2025

Nepal's Import of Major Commodities Surges by 13.1% in FY 2024/25
Nepal's Import

2 min read

Nepal's Import of Major Commodities Surges by 13.1% in FY 2024/25

Nepal's major imports over three fiscal years (2022/23 to 2024/25), highlighting both consistency and shifts in import patterns. Petroleum products remain the dominant import category despite a slight decline in 2024/25. A striking rise is observed in crude soybean oil imports, surging dramatically in 2024/25 after a dip the previous year—signaling either changing consumption patterns or policy shifts. Transport equipment and other machinery also show consistent growth, suggesting robust infrastructure and industrial activity. Notably, imports of edible oil, hotrolled sheets, and rice/paddy have sharply increased, indicating rising domestic demand. Conversely, gold imports have declined significantly, possibly due to regulatory changes or subdued consumer interest. Overall, the heatmap captures a broadening import base with rising volumes across industrial, agricultural, and consumer goods, pointing to a growing and diversifying economy.

Sandeep Chaudhary

·

9 Jul, 2025

Nepal's Export to China Grows by 3%, Driven by Woolen Carpets and Agarbatti, Despite Noodle Collapse
Export to China

2 min read

Nepal's Export to China Grows by 3%, Driven by Woolen Carpets and Agarbatti, Despite Noodle Collapse

In the first eleven months of FY 2024/25, Nepal's exports to China showed a mixed performance across major commodities. Woolen carpets emerged as the top export item, witnessing a sharp increase from Rs. 383 million to Rs. 706.3 million — an 84.4% rise. Pashmina and agarbatti also performed well, with increases of 44.8% and 21% respectively. In contrast, noodle exports suffered a drastic fall of 85%, dropping from Rs. 149.8 million to Rs. 22.5 million. Similarly, handicrafts (metal and wooden) and rudrakshya saw declines of 21.4% and 26.3%. The export of readymade garments and leather goods also dropped. Overall, while certain traditional and artisanal goods gained traction in the Chinese market, others, particularly processed foods and crafts, struggled to maintain their momentum.

Sandeep Chaudhary

·

9 Jul, 2025

Nepal’s Export to India Surges Sharply in 2024/25 Despite Past Declines
Export India

2 min read

Nepal’s Export to India Surges Sharply in 2024/25 Despite Past Declines

In the first eleven months of fiscal year 2024/25, Nepal’s exports to India saw a remarkable shift, driven heavily by a dramatic surge in Soyabean Oil, which alone contributed nearly 79% of the selected commodity exports. The export of Soyabean Oil skyrocketed by over 10,000%, becoming the single biggest contributor to Nepal's trade surge with India. Other significant gainers included Plastic Utensils (up by 371%), Shoes and Sandals (53%), Jute Goods – Hessian (41%), and Polyster Yarn (33.6%), reflecting broader strength across both industrial and consumer goods sectors. On the flip side, several key commodities witnessed steep declines. Wire exports dropped by 81.8%, Palm Oil fell by 68.4%, and Ginger by 64.9%, pointing to weaknesses in agri-based and industrial exports. Notably, Toothpaste maintained its previous year’s export level, indicating stability in select FMCG categories. This overall trend showcases a sharp recovery and concentration in a few high-performing commodities, while traditional export items remained volatile. The data suggests a need for Nepal to diversify and strengthen underperforming sectors to maintain a sustainable trade balance with India.

Sandeep Chaudhary

·

9 Jul, 2025

Nepal’s Export Sees Remarkable Growth in FY 2024/25 with Soyabean Oil
Export

2 min read

Nepal’s Export Sees Remarkable Growth in FY 2024/25 with Soyabean Oil

Nepal’s export composition over the past three fiscal years. Most notably, Soyabean Oil has emerged as a dominant export item, surging from under Rs. 1 billion in 2023/24 to over Rs. 93.5 billion in 2024/25, reshaping the export landscape. Other commodities such as Polyester Yarn & Thread, Jute Goods, Tea, Shoes and Sandals, and Rosin have shown consistent growth, reflecting diversification in industrial and semi-processed goods. Conversely, traditional export leaders like Palm Oil, Readymade Garments, and Zinc Sheets have seen sharp declines, indicating changing global demand or policy impacts. Overall, the export pattern highlights Nepal’s shifting strengths toward agro-industrial and synthetic products, while still maintaining a foothold in heritage goods like Woolen Carpets and Pashmina.

Sandeep Chaudhary

·

9 Jul, 2025

Nepal's Foreign Trade Surges by 18.8% Despite Persistent Trade Deficit
Foreign Trade

2 min read

Nepal's Foreign Trade Surges by 18.8% Despite Persistent Trade Deficit

In the first eleven months of fiscal year 2024/25, Nepal’s foreign trade activities saw a robust expansion, with total trade reaching Rs. 1.89 trillion—an 18.8% rise from the same period of the previous year. Exports soared by 77.8% to Rs. 247.57 billion, largely due to a 112.6% surge in shipments to India. Imports also increased, albeit at a slower pace of 13.1%, totaling Rs. 1.64 trillion. Despite the significant export growth, Nepal’s trade balance remained negative at Rs. -1.39 trillion, though it showed a 6.3% improvement over the prior year. The heatmap and comparative charts reveal a clear expansion in trade volume across all segments, with notable gains in trade with China and other countries as well. This growth, while encouraging, continues to reflect Nepal’s heavy reliance on imports, underscoring the need for deeper export diversification and domestic industrial strengthening.

Sandeep Chaudhary

·

9 Jul, 2025

Consumer Price Inflation Trends: Nepal-India Gap Narrows in FY 2024/25
Inflation

1 min read

Consumer Price Inflation Trends: Nepal-India Gap Narrows in FY 2024/25

In fiscal year 2024/25, consumer price inflation in Nepal has shown a declining trend, averaging 4.24% up to mid-June, compared to India’s 4.33%. The gap between the two countries has significantly narrowed, with Nepal even recording lower inflation than India in months like September and October. The chart highlights that while India's inflation exhibited moderate volatility across months, Nepal maintained a more consistent downward trajectory. This convergence in inflation rates reflects a relative stabilization in Nepal’s price environment and indicates improved control over domestic inflationary pressures amid global economic fluctuations.

Sandeep Chaudhary

·

9 Jul, 2025