Terai Inflation at 1.33%: Food Declines 3.03% While Non-Food Jumps 4.17%

The latest CPI data for July–August 2025/26 shows that the Terai region recorded a modest inflation of 1.33% year-on-year, with the index rising from 103.73 last year to 105.11 this year. On a monthly basis, the Terai saw a 0.46% increase compared to June–July 2025, reflecting ongoing price pressures despite easing food costs.

The Food and Beverage group (38.35% weight) posted a notable -3.03% year-on-year decline, with the index falling from 106.57 to 103.34. This decline indicates that households in the Terai are benefitting from cheaper cereals, vegetables, and seasonal agricultural produce, which form a major part of rural and semi-urban consumption. However, the relief in food prices was overshadowed by rising non-food costs.

The Non-food and Services group (61.65% weight) surged by 4.17% year-on-year, climbing from 101.97 to 106.22. This reflects rising expenses in housing, education, healthcare, utilities, and other service-related sectors. For Terai households, this sharp increase in non-food items signals structural inflationary pressure, as families spend a larger portion of their income on services and essentials beyond food.

In short, while the Terai region is seeing food-driven relief, the sharp rise in non-food and service prices is creating a cost-of-living squeeze. The contrasting trends highlight that the Terai’s inflation story is no longer just about food—it is increasingly being shaped by service-sector inflation, similar to Kathmandu Valley.