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Inflation below 3%

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Inflation below 3%
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April 10: During the month of mid-February to mid-March of the current FY, inflation has been limited to 2.9 percent. The inflation rate was 10.2 percent during the review period of last FY.

According to Current Macroeconomic and Financial Situation of Nepal (Based on Eight Months’ Data of 2016/71), the improved supply situation of merchandises has led decline in inflation rate. During the review period, the food inflation remained negative by 0.4 percent in mid-March 2017 from 10.3 percent in the corresponding period of the previous year.

Moreover, the report mentioned that a fall in prices of pulses and legumes by 11.2 percent, 2 vegetable by 8.3 percent, ghee and oil by 5.8 percent and cereal grains by 0.1 percent caused food inflation to decline.  In food and beverage group, the prices of sugar and sugar products increased by 15.2 percent and alcoholic drinks by 10.7 percent in the review period.

Similarly, as per the report, the non-food inflation also declined to 5.6 percent during the review period from 10.2 percent in the corresponding period of the previous year. The decline in growth rate of prices of clothes and footwear, communication, housing and utilities, transportation, among others contributed to the moderation in non-food inflation in the review period.

Region wise, the Hilly region witnessed a relatively higher rate of inflation of 5.9 percent followed by 3.7 percent of Mountain region, 2.8 percent of Terai region and 1.9 percent of Kathmandu Valley in the review period. In the corresponding period of the previous year, Hilly region, Mountain region, Terai region and the Kathmandu Valley had witnessed inflation rate of 10.4 percent, 8.5 percent, 8.6 percent and 12.7 percent respectively, reads the report. 

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