Inflation back to double digits

KATHMANDU, FEB 24 -

Inflation has risen again into the double digits after remaining in the single digit during the first five months of the current fiscal year. The half-yearly macro-economic report of Nepal Rastra Bank (NRB) shows that consumer inflation reached 11.3 percent in the sixth month of the fiscal year.

The increase in inflation has been attributed a rise in the cost of petroleum products, public transport and food. Food, beverages, clothing, footwear and transport have all become more expensive.
According to the NRB report, the price indices of both the food and beverage group and the non-food and services group increased by 17.6 percent and 6.2 percent respectively.

There has been a sharp rise in vegetable prices, especially of onions. An increase in onion prices in India affected the domestic market too. Consumers have been hit by price hikes in vegetables, cereal grains and their products, fruits, spices, meat, sugar and sweets during the period.

"There has been a rise in the price of vegetables, meat and food products pushing the overall inflation into double digits," said NRB spokesman Bhaskar Mani Gyawali. "It may ease in the coming months with a decline in prices in the Indian market." According to NRB, the price index of the vegetable subgroup increased by the highest rate of 67.4 percent, followed by fruits and spices with increments of 26.7 percent and 22.6 percent respectively.

Similarly, prices of cereal grains and their products, meat and fish and milk products and egg increased by 15.5 percent, 9.5 percent and 14.0 percent respectively.

In the non-food and services group, prices of clothing and footwear swelled by 14.8 percent while transport costs rose 11.2 percent. With petroleum prices going up, public transport fares have been increased of late. The NRB report says the wholesale price of petroleum products and coal has increased by 17.9 percent.

For a large part of 2009-10, inflation had remained in the double digits. However, it started to drop at the start of the current fiscal year. Despite the monetary policy

saying inflation would be maintained at 7 percent, NRB officials said it would be

higher than that.

Posted on: 2011-02-24 08:57
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