Provincial CPI Breakdown: Where Are Living Costs Rising Fastest in Nepal?

The mid-July to mid-August 2025/26 Consumer Price Index (CPI) highlights sharp variations in inflation across Nepal’s provinces, showing that living costs are rising unevenly across the country.

Koshi Province stands out with the highest non-food inflation at 6.26%, driven largely by rising education, housing, and service costs. Rural Koshi has been hit hardest, recording a staggering 8.42% rise in non-food expenses, making it the costliest region for households this year.

Madhesh Province followed closely with 4.67% non-food inflation. Rural Madhesh recorded an even higher spike at 6.91%, reflecting the vulnerability of households to supply chain disruptions and rising service-sector prices. Food prices there climbed 1.69%, adding further pressure.

Bagmati Province, home to the Kathmandu Valley, showed 3.33% non-food inflation, with the Valley itself leading at 3.95%. Rising rents, education costs, and urban services are the main drivers, making the capital region one of the priciest places to live despite falling food costs (-2.05%).

In Lumbini Province, non-food inflation hit 4.09%, with urban households (4.21%) outpacing rural (3.87%). Although food inflation fell (-3.25%), higher costs in education and housing kept overall living expenses elevated.

Gandaki Province presented a mixed trend: while food prices fell sharply (-2.24%), non-food inflation rose by 2.87%, leaving urban areas with higher burdens than rural households. Similarly, Karnali Province recorded a modest overall inflation of 1.79%, but non-food costs climbed 3.12%, showing how services continue to drive inflation even in less-developed regions.

Sudurpaschim Province reported one of the lowest overall inflations at 0.31%, as food costs dropped (-2.47%). Still, non-food inflation of 2.05% showed that service-related expenses remain a challenge across the board.

This provincial breakdown reveals a common national pattern: food prices are largely stable or declining, but non-food inflation is steadily rising, with rural households suffering more from service-sector costs than their urban counterparts.