Inflation further decelerates to 2.3 per cent

Kathmandu: The consumer price inflation (CPI) further decelerated to 2.3 per cent in mid-August 2017 from 2.7 per cent in mid-July 2017 and 8.6 per cent a year ago.

The higher base price of the previous year contributed to the moderation of inflation during the review period, according to the macro-economic report published by Nepal Rastra Bank (NRB) Friday.

Food inflation turned negative by 1 per cent in mid-August 2017 from 9.3 per cent in the corresponding month of the previous year.

The fall in the prices of pulses and legumes by 23.3 per cent, vegetables by 11.7 per cent, spices by 3.5 per cent and fruits by 1.4 per cent was responsible for the negative inflation in food during  the review period, the NRB said.

Non-food inflation also decelerated to 4.9 per cent during the review period from 8.1 per cent in the corresponding period of the previous year.

The decline in the growth rate of prices of clothes and footwear, housing and utilities, furnishing and household equipment, among others, caused the moderation in non-food inflation in the review period.

Under the region-wise consumer price Inflation, the mountain region witnessed a relatively higher rate of inflation of 5.6 per cent followed by the Terai region of 2.8 per cent, hilly region of 2.2 per cent and the Kathmandu Valley of 1.3 per cent during the review period.

The y-o-y consumer price inflation was relatively lower at 2.3 per cent in Nepal in mid-August 2017 compared to 3.4 per cent in India, showing an inflation wedge of 1.1 per cent between the two countries.

A year ago, the rate of inflation was 8.6 per cent in Nepal compared to 5.1 per cent in India, reflecting a wider inflation differential of 3.5 per cent.

The y-o-y wholesale price inflation moderated to 1.2 per cent in the review period from 5.9 per cent a year ago.

The wholesale price indices of agricultural commodities, domestic manufactured commodities and imported commodities registered a growth of 0.6 per cent, 3.8 per cent and 0.7 per cent respectively in the review period.

The y-o-y salary and wage rate index grew by 6.4 per cent in the review period compared to 14.9 per cent in the corresponding period of the previous year.

In the review period, the salary index increased by 14.6 per cent, while the wage rate index grew by 4.4 per cent.

The salary indices of bank and financial institutions, education and public corporations sub-groups increased by 10.6 per cent, 5.8 per cent and 4.9 per cent respectively in the review period.

Likewise, wage rate indices of agricultural labourer, industrial labourer and construction labourer witnessed a growth of 2.8 per cent, 8.9 per cent and 2.1 per cent respectively in the review period.