Price hike trots at steady pace

KATHMANDU: Price hike in Kathmandu Valley, Hills and Tarai maintained a similar trend. “Region-wise, price rise in Kathmandu valley was 12.5 per cent followed by 11.8 per cent in Hills and 11.7 per cent in Terai in the reviewed period. Last year, the respective rates were 8.6 per cent, 8.5 per cent and 9.2 per cent,” according to the Nepal Rastra Bank — the central bank — current macroeconomic situation based on the third quarter’s report.

Incidentally, the price hike seems to be slowing down. According to the year-on-year (y-o-y) consumer price inflation data, it rose to 11.9 per cent in mid-April 2009 from 8.9 per cent in the same period last year. “The inflation, in the review period, was driven mainly by the rise of 14.8 per cent in food and beverages group,” said the central bank. The price index of non-food and service group increased by 8.8 per cent. The price rise of food and beverages and non-food and services group was 12.6 per cent and 4.9 per cent respectively in mid-April 2008.

In the food and beverage group, price indices of sugar and sugar-related products increased in mid-April 2009 by a whopping rate of 50.5 per cent. This is in sharp contrast to last year’s decline of 3.8 per cent, said the report.

Similarly, the price indices of meat, fish and eggs as well as vegetables and fruits sub-groups increased in the review period by 28.2 per cent and 21.3 per cent respectively compared to an increase of 8.8 per cent and three per cent in the same period last year. During the review period, the indices of pulses rose up by 20.7 per cent compared to an increase of 14.9 per cent in the same period last year.

In the review period, the y-o-y core inflation rose to 12.1 percent from 7.0 percent a year ago. The y-o-y wholesale price inflation increased to 13.7 per cent compared to 9.4 per cent a year ago. The index of agricultural, domestically manufactured and imported commodities increased by 19 per cent, 9.1 per cent and 8.7 per cent respectively in the review period as compared to 10.4 per cent, 8.5 per cent and 8.3 per cent a year ago.

Of agricultural commodities, mainly the price index of cash crops increased by 34.3 per cent in the review period compared to a rise of six per cent a year ago. Likewise, livestock production and fruits and vegetables increased by 30.3 per cent and 26.7 per cent compared to an increase of 7.1 per cent and 4.1 per cent in the same period last year.

The overall y-o-y salary and wage rate index rose by 20.3 per cent in the review period as compared to a rise of 9.2 per cent a year ago. The salary index increased by 16.8 per cent in the review period compared to a rise of 10.9 per cent in the corresponding period the previous year.

In the first nine months of 2008-09, the government budget remained at a surplus of Rs 12.7 billion in contrast to a deficit of Rs 5.3 billion in the corresponding period the previous year. “An impressive growth of resource mobilisation relative to the government expenditure accounted for such a budget surplus in the review period,” the report said. In the review period, the government has significant cash surplus of Rs 28 billion with Nepal Rastra Bank (NRB).