Overall Inflation Rises Moderately to 5.74% — Price Pressure Shifts to Services Sector

Nepal’s overall consumer inflation increased moderately in mid-September (Bhadau 2082), as the National Consumer Price Index (NCPI) reached 105.74 points, up from 104.96 a month earlier.
This represents a 0.74% month-on-month rise and a 1.87% year-on-year increase.

According to Nepal Rastra Bank’s mid-month report, the overall price level has grown 3.86% compared to two years ago, signaling continued inflationary pressure though at a controlled pace.
Analysts suggest that inflationary drivers are shifting away from food items toward services like education, health, housing, and miscellaneous expenses.

2. Food Inflation Eases Slightly — Cereal, Pulses, and Spices Prices Fall

The Food and Beverages Index (weight 35.49%) increased marginally by 1.43% month-on-month, reaching 104.90, but was 1.34% lower compared to the same month last year.
This suggests that food inflation is easing after months of volatility.

• Cereal grains and pulses declined slightly by 0.32% and 0.67%, respectively, reflecting good domestic harvest and stable supply.

• Spices saw the sharpest fall of 6.31%, supported by better local production of chili and turmeric.

• However, ghee and oil prices continued to soar (+11.09% year-on-year) due to higher import costs.

3. Non-Food and Services Drive Inflation — Education and Health Costs Surge

The Non-Food and Services group (64.51% of the index) remains the key inflation driver. The index rose 0.37% monthly and 3.70% annually, reaching 106.21 in Bhadau.

• Education costs jumped 7.67% year-on-year — the highest rise among all sectors — mainly due to private school and college fee hikes.

• Health expenses rose 2.98%, and restaurant and accommodation costs increased by 3.88%, showing a strong rebound in urban services.

• Transportation costs grew by 2.56%, largely due to higher fuel prices.

4. Miscellaneous Goods and Services See Highest Price Surge — 11.77% Rise

Among all categories, Miscellaneous Goods and Services recorded the highest annual increase of 11.77%, climbing from 105.77 to 118.22 over a year.
This category includes personal care products, toiletries, and household services, which have become costlier due to imported material costs and higher local demand.

Clothes and footwear also saw a 6.29% rise, reflecting festive-season spending and costlier imported textiles.

5. Stable Communication, Finance, and Housing Prices Offer Relief to Consumers

Amid rising costs elsewhere, some sectors provided relief to consumers.

• Insurance and financial services remained nearly flat (-0.22%).

• Communication prices showed minimal change (-0.03%), reflecting competitive telecom rates.

• Housing and utilities rose just 1.02% year-on-year, supported by stable rent and energy prices.

Economists say such stability in essential service prices has helped contain headline inflation below 6%, preventing severe cost-of-living shocks.

Nepal’s inflation pattern in Bhadau 2082 shows a shift from food-based inflation to service-led inflation.
While basic food items have stabilized, education, health, transportation, and miscellaneous goods are putting pressure on household budgets.
Economists expect the annual inflation rate to remain between 5.5% and 6% if global oil prices and import costs do not rise further.