Consumer price inflation moderate to 3.1 per cent

BOP

Kathmandu: Consumer price inflation (CPI) moderated to 3.1 per cent in mid-October 2017 from 6.7 per cent a year ago.

The higher base price of the previous year has largely contributed to the moderation of inflation in the review period, according to the current macroeconomic and financial situation of Nepal published by the Nepal Rastra Bank (NRB) on Sunday.

Food inflation has decelerated to 0.5 per cent in mid-October 2017 from 5.7 per cent of the corresponding period the previous year.

A fall in the prices of pulses and legume by 22.9 per cent, spice by 5.7 per cent, vegetables by 5.1 per cent and fruit by 3.7 per cent contributed to the deceleration in overall food inflation rate, the report said.

Non-food inflation moderated to 5.2 per cent during the review period from 7.6 per cent in the corresponding period of the previous year.

The slower growth of prices of clothes and footwear, furnishing materials and household equipment, housing and utilities, among others, contributed to the moderation of non-food inflation during the review period.

The mountainous region witnessed relatively a higher rate of inflation of 5.1 per cent followed by the Terai region of 3.6 per cent, hilly region of 3.0 per cent and the Kathmandu Valley of 2.3 per cent in the review period.

The year-on-year (y-o-y) wholesale price inflation moderated to 1.6 per cent in the review period from 5 per cent a year ago. The wholesale price indices of agricultural commodities, domestic manufactured commodities and imported commodities grew by 1 per cent, 4.2 per cent and 1.2 per cent respectively in the review period.

The y-o-y salary and wage rate index rose by 5.5 per cent in the review period compared to 14.4 per cent of the corresponding period the previous year.

In the review period, the salary index increased by 14.4 per cent while the wage rate index grew by 3.3 per cent.

The salary indices of the banks and financial institutions, education and public corporations sub-groups increased by 10.6 per cent, 5.8 per cent and 0.8 per cent respectively during the review period.

Likewise, wage rate indices of agricultural labourer, industrial labourer and construction labourer witnessed a growth of 2 per cent, 6.3 per cent and 3.2 per cent respectively in the review period.

Meanwhile, the government budget has stood a surplus of Rs. 11.63 billion during the first three months of the current fiscal year 2017/18.

Such surplus was Rs. 28.84 billion in the corresponding period of the previous year.

In the review period, government expenditure on a cash basis stood at Rs. 138.84 billion. Such expenditure was just Rs. 95.16 billion in the corresponding period of the previous year.

The recurrent expenditure stood at Rs. 126.35 billion during the review period. Such expenditure was Rs. 86.79 billion in the corresponding period of the previous year.

Capital expenditure increased by 59.6 per cent to Rs. 11.64 billion during the review period compared to same period last year. Such expenditure was Rs. 7.29 billion in the corresponding period of the previous year.

In the review period, the government revenue collection increased by 10.7 per cent to Rs. 139.65 billion. Such revenue had increased by 66.7 per cent to Rs. 126.12 billion in the corresponding period of the previous year.

Although revenue collection increased, the revenue collection has been less than the target. The growth in the government revenue continues to remain sensitive to high tariff rate related imports.

Because of a slow pace of government expenditure relative to resource mobilisation, the treasury surplus amounted to Rs. 246.04 billion as of mid-October 2017.