KATHMANDU, JUL 13 - 2012
Rise in prices of both food and non-food items has pushed inflation close to digits, thanks to supply constraints and appreciation of the US dollar against the Nepali rupee.
Inflation rose to 9.9 percent in the 11th month of the fiscal year — this year’s highest, according to a source at the Nepal Rastra Bank (NRB).
Although the price level moderated in the middle of the year, coming down to as low as 6.8 percent in mid-January, the figure remained static at 7 percent in mid-February and mid-March and started to ascend in latter months. Earlier, the figure had hit 8.9 percent in mid-October.
“The latest price rise is mainly the result of supply constraints due to several nationwide bandas and strikes ahead of the dissolution of the Constituent Assembly,” said the NRB official. “In the meantime, the appreciation of dollar against rupee also contributed to the rise in prices of third-country imports.”
According to the official, food prices rose slightly, while prices of vegetables and fruits skyrocketed. Supply constraint is expected to prevail for a few more months of monsoon. “Nepal’s price rise is also correlated with inflation in India where consumer price index is at double digits,” said the official.
Traders also say prices of essential goods such as rice, pulse and edible oil have gone up by 10-12 percent as of July, compared to the same period last year. “For essential commodity prices, it is a huge increment,” said Pabitra Bajracharya, president of Nepal Retailers’ Association. “Purchasing capacity of general people hasn’t increased in the way inflation has gone up. This is a very bad sign for the whole sector.”
According to Bajracharya, oil price has gone up by Rs 20 per litre on an average, while a 30-kg rice packet has become costlier by Rs 100 to Rs 250. Pulses have also become dearer by Rs 10-25 per kg. “As most of the edible oil comes from third countries, mainly from South American, the strengthening of dollar is to blame for the price rise,” said Ishwor Shrestha, one of the major importers of edible oil and sugar.
As far as vegetables are concerned, their prices rose by as high as 60 percent, compared to prices in mid-September 2011. The price of long brinjal rose by 60 percent to Rs 33 per kg, while white potato price reached Rs 25.5 per kg, up 42 percent.
Over the last year, there has been a significant rise in transportation costs too, which has made goods expensive. Bajracharya said cargo vans have doubled their charge within the Valley to Rs 800 per tip.
Inflation Figures
Mid-Aug 2011 7.7
Mid-Sept 2011 8.5
Mid-Oct 2011 8.9
Mid-Nov 2011 8.5
Mid-Dec 2011 7.5
Mid-Jan 2012 6.8
Mid-Feb 2012 7.0
Mid-March 2012 7.0
Mid-April 2012 7.5
Mid-May 2012 8.7
Mid-June 2012 9.9
Source: Nepal Rastra Bank/ The Kathmandu Post
Rise in prices of both food and non-food items has pushed inflation close to digits, thanks to supply constraints and appreciation of the US dollar against the Nepali rupee.
Inflation rose to 9.9 percent in the 11th month of the fiscal year — this year’s highest, according to a source at the Nepal Rastra Bank (NRB).
Although the price level moderated in the middle of the year, coming down to as low as 6.8 percent in mid-January, the figure remained static at 7 percent in mid-February and mid-March and started to ascend in latter months. Earlier, the figure had hit 8.9 percent in mid-October.
“The latest price rise is mainly the result of supply constraints due to several nationwide bandas and strikes ahead of the dissolution of the Constituent Assembly,” said the NRB official. “In the meantime, the appreciation of dollar against rupee also contributed to the rise in prices of third-country imports.”
According to the official, food prices rose slightly, while prices of vegetables and fruits skyrocketed. Supply constraint is expected to prevail for a few more months of monsoon. “Nepal’s price rise is also correlated with inflation in India where consumer price index is at double digits,” said the official.
Traders also say prices of essential goods such as rice, pulse and edible oil have gone up by 10-12 percent as of July, compared to the same period last year. “For essential commodity prices, it is a huge increment,” said Pabitra Bajracharya, president of Nepal Retailers’ Association. “Purchasing capacity of general people hasn’t increased in the way inflation has gone up. This is a very bad sign for the whole sector.”
According to Bajracharya, oil price has gone up by Rs 20 per litre on an average, while a 30-kg rice packet has become costlier by Rs 100 to Rs 250. Pulses have also become dearer by Rs 10-25 per kg. “As most of the edible oil comes from third countries, mainly from South American, the strengthening of dollar is to blame for the price rise,” said Ishwor Shrestha, one of the major importers of edible oil and sugar.
As far as vegetables are concerned, their prices rose by as high as 60 percent, compared to prices in mid-September 2011. The price of long brinjal rose by 60 percent to Rs 33 per kg, while white potato price reached Rs 25.5 per kg, up 42 percent.
Over the last year, there has been a significant rise in transportation costs too, which has made goods expensive. Bajracharya said cargo vans have doubled their charge within the Valley to Rs 800 per tip.
Inflation Figures
Mid-Aug 2011 7.7
Mid-Sept 2011 8.5
Mid-Oct 2011 8.9
Mid-Nov 2011 8.5
Mid-Dec 2011 7.5
Mid-Jan 2012 6.8
Mid-Feb 2012 7.0
Mid-March 2012 7.0
Mid-April 2012 7.5
Mid-May 2012 8.7
Mid-June 2012 9.9
Source: Nepal Rastra Bank/ The Kathmandu Post
