KATHMANDU, June 10: Consumer price inflation continued to soar for the past few months mainly due to the hike in petroleum prices after the US-Iran tension.
As per the ‘Current Macroeconomic and Financial Situation Report of Nepal’ published by Nepal Rastra Bank (NRB), the year-on-year consumer price inflation stood at 5.04 percent in mid-May 2026 compared to 2.77 percent a year ago. Inflation was recorded at 4.47 percent in mid-April, while it was 3.39 percent in the previous month. Consumer price inflation crossed five percent last month, which was the highest rate in the past 16 months on a monthly basis.
Increasing prices of petroleum products took a toll on average market prices, pushing the inflation rate upward, according to market analysts. Petrol, which was Rs 157 per litre before the US-Iran tension, now stands at Rs 217, while diesel has jumped from Rs 142 to Rs 225 per litre. The price hike is expected to hit general people more with the government revising the rates of taxes through the annual budget announced on May 29.
As per the NRB’s records, food and beverage inflation stood at 4.63 percent last month, which was way higher than the 4.01 percent in the previous month. Non-food and service inflation stood at 5.26 percent, up from 4.72 percent. As of mid-May last year, the indices of these groups had increased by just 1.52 percent and 3.45 percent, respectively.
Under the food and beverage category, the year-on-year price index of the ghee and oil sub-category increased by 13.99 percent, fruit by 18.60 percent, vegetables by 5.40 percent and meat and fish by 4.16 percent. The price index of the pulses and legumes sub-category however decreased 1.67 percent and spices by 0.65 percent.
Under the non-food and services category, the price index of the miscellaneous goods and services sub-category increased by 19.90 percent, transportation by 15.30 percent, education by 5.54 percent, alcoholic drinks by 4.77 percent, and clothes and footwear by 4.73 percent last month.
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During the review month, the price index in rural areas increased by 4.35 percent, while in urban areas it rose by 5.29 percent.
Based on provinces, consumer price inflation in the review month was 5.64 percent in Koshi Province, 5.47 percent in Madhesh Province, 4.55 percent in Bagmati Province, 4.86 percent in Gandaki Province, 5.31 percent in Lumbini Province, 4.88 percent in Karnali Province, and 4.65 percent in Sudurpashchim Province.
The average inflation in 10 months of the current fiscal year, however, was less than that recorded in the corresponding period last year. According to the NRB, the 10 month consumer price inflation stood at 2.66 percent as of mid-May this year, compared to 4.39 percent a year ago.
Nepal’s macroeconomic condition at a glance (based on 10 months’ report):
Remittance inflow: Rs 1.916 trillion
Growth rate of remittance: 41.2 percent
Average inflation: 2.66 percent
Forex reserves: Rs 3.704 trillion
Growth rate of forex reserves: 38.3 percent
Adequacy of forex reserves: 22.6 months imports
Current account surplus: Rs 729.28 billion
Net capital transfers: Rs 14.65 billion
BoP surplus: Rs 863.56 billion
Source: Nepal Rastra Bank
