Kathmandu, February 21

Consumer prices went up by 12.1 per cent in January, as supply disruptions along Nepal-India border points continued to exert pressure on prices of food and non-food items.

Inflation stood at 6.8 per cent in the same month a year ago.

“The prolonged strikes in the Tarai and disruption on trade routes in the southern parts of the country were the underlying factors that drove up prices during the review period,” says the Macroeconomic Report published by Nepal Rastra Bank (NRB) today. “However, the recent return of normalcy in the southern trade routes is likely to moderate the rate of inflation in the remaining period of the current fiscal year.”

The NRB report shows that prices of pulses and legumes shot up by a startling 46.9 per cent in January. Also, prices of ghee and oil surged by 31.3 per cent, while prices of spices went up by 17.6 per cent in the same month.

Overall, prices of food and beverage items went up by an average of 15.2 per cent in January.

Non-food items also witnessed double-digit hike in their prices, shows the latest NRB report.

Prices of clothes and footwear, for instance, jumped up by 13.7 per cent in January. Similarly, housing and utility prices went up by 12.9 per cent, while education fees witnessed a hike of 12.6 per cent.

Overall, prices of non-food items and services jumped by an average of 9.7 per cent in January.

Among different regions in the country, Kathmandu Valley saw the sharpest hike in consumer prices of 13.8 per cent in January. Food prices in the Valley shot up by an average of 18.5 per cent, while prices of non-food items jumped up by an average of 10.8 per cent.

The mountainous region saw the lowest price hike of 10 per cent, followed by the Tarai where inflation stood at 10.7 per cent. Inflation stood at 12.1 per cent in the hilly region.

Rampant hike in consumer prices erodes the value of money, which tends to make people poorer, especially when rise in prices is not matched by growth in income level.

In month of January, salaries of white-collar workers increased by an average of 0.8 per cent, with employees of banks and financial institutions witnessing highest salary hike of 2.3 per cent, shows NRB report.

Wages of blue-collar workers, on the other hand, went up by 5.4 per cent in the same month. Among blue-collar workers, construction workers saw their wages go up by 9.3 per cent, while wages of agricultural and industrial workers increased by 5.6 per cent and 3.6 per cent, respectively.