Kathmandu, October 18:

The consumer price has shot up by 6.9 per cent during mid-August 2006 compared to an increase of 7.3 per cent in the corresponding period of the previous year, says Nepal Rastra Bank’s (NRB) economic update released today.

NRB has been behind the schedule in releasing the economic indicators this time, thanks to weak management and slow reform process in the central bank.

The current fiscal year’s first months’ economic update has been delayed for more than two months, which clearly shows the ‘inefficiency’ gripping the central bank compared to previous years.

The rise in inflation has been attributed to a hike in petroleum products’ prices in 2005-06, including a hike in the prices of transportation fare and prices of pulses. During this period, foreign cash grant and foreign cash loans decreased by 50.7 per cent and 67.3 per cent respectively, during mid-August 2006.

The average growth rate of the price index from mid-September 2005 through mid-August 2006 stood at 7.9 per cent compared to 5.0 per cent in the corresponding period of the previous year.

Price index of food and beverages group surged by 6.1 per cent compared to an increase of 6.6 per cent in the corresponding period last year, thanks to a sharp rise in the prices of spices and pulses.

The index of non-food and services group increased by 7.8 per cent compared to an increase of 8.0 per cent in the same period last year. The effect of the rise in the prices of petroleum products two times in 2005-06 as well as the increase in the prices of transportation fare in February 2006 accounted for the rise in the price index of this group.

The index of agricultural goods registered a lower growth of 4.5 per cent while imported commodities recorded a higher growth of 10 per cent. The average National Wholesale Price Index from mid-September 2005 through mid-August 2006 increased by 8.7 per cent compared to a rise of 7.5 per cent in the same period last year.

The government’s expenditure decreased by 17.3 per cent to Rs 2.9 billion in the review period compared to an increment by 15 per cent during the first month of 2005-06, thanks to improved security situation in the country.

Exports in first month of the current fiscal declined by 4.5 per cent in contrast to an increase of 13.2 per cent in the corresponding period last year. However, imports went up by 6.3 per cent in the same period.

The gross foreign exchange reserves increased by 3.1 per cent to Rs 170.1 billion in mid-August 2006 compared to two per cent in the last fiscal during the same period.