Vegetable Prices Crash by 18%: Key Insights from Nepal’s Latest CPI Report

The latest mid-month CPI data for July–August 2025/26 has highlighted one of the sharpest declines in food prices in recent years, with vegetable prices plunging by 18.56% overall. Urban households saw an even steeper fall of 19.29%, while rural areas recorded a 16.88% decline. This dramatic drop has been the major driver behind the 2.28% contraction in the overall Food and Beverages group, which holds a weight of 35.49% in the CPI basket. The fall in vegetable costs provided some relief to households struggling with daily expenses, but the overall inflation story remains mixed.

Despite cheaper vegetables, the overall CPI index still climbed by 1.68% year-on-year, reaching 104.96 points, as strong non-food inflation offset the food price relief. The Non-Food and Services group, which makes up 64.51% of the index, recorded a 3.95% rise, fueled by notable increases in key categories. Ghee and Oil prices jumped 10.97%, significantly burdening household kitchens, while Education costs surged 7.67%, reflecting higher tuition and fees. Similarly, clothes and footwear (+6.84%), miscellaneous goods and services (+10.60%), and health (+2.98%)contributed to keeping inflation elevated.

This dual movement shows that while families benefit from cheaper vegetables and some food items, the rising costs of non-food essentials are squeezing household budgets. The fall in vegetable prices may be seasonal and temporary, but rising education, oil, and service costs indicate structural pressures in Nepal’s inflation trend. Overall, the data reflects a complex inflation environment where gains in one sector are quickly eroded by rising costs in another.