Consumers predict price hikes in next three months

Kathmandu, Feb. 15

A recent survey of the Nepal Rastra Bank has shown that the majority of consumers have a feeling that the price of goods would go up in the next three months.

According to the results of Inflation Expectations Survey (IES) of the second quarter of the current Fiscal Year 2022/23 conducted by the central bank, 84.6 per cent of respondents have expected price levels to increase in next three months.

Likewise, 92.3 per cent of respondents have expected price levels to increase over the next one year.

The survey was conducted during January 8-14 this year among individual respondents from 60 market areas through field interviews. The results are based on responses from 2,010 individuals.

However, the share of respondents expecting price increases in next three months as well as next one year has decreased from mid-October, 2022. It was 86.6 per cent then which was also lower than that of mid-July 2022 when 94.7 per cent participants had said that the price would go up in the following three months' period.

The share of respondents expecting price increase in food and its sub-group except fish, meat, milk, ghee and oil and hotel and restaurant has increased. However, the increment is nominal with expectation for food price hike going up to 88.9 per cent in mid-January from 87.2 per cent three months earlier, while respondents thinking the price of vegetables and fruits would go up to 86.5 per cent in January from 82 per cent in October last year.

The share of respondents expecting price increase in non-food and services and real estate (housing) during the next three months has slightly decreased compared to that of mid-October, 2022. The expectation percentage in terms of non-food and services has come down to 74.5 per cent from 76.1 per cent, according to the report.

The share of respondents expecting price increase in one year ahead across the entire food products, except for fish, meat, milk, ghee and oil, drinks and tobacco and hotel and restaurant along with non-food and services groups has decreased compared to October last year.

Median inflation expectation for three months ahead and one year ahead has remained same compared to mid-October 2022 and mean inflation expectation for three months ahead and one year ahead has decreased, said the NRB.

Median inflation expectations for three months and one year ahead stand at 10.0 per cent and 12.0 per cent respectively which means individuals expect inflation to remain stable in the near term as well as in medium term.

Published in The Rising Nepal daily on 16 February 2023.