Tuesday, October 1, 2024

Inflation eases to 4.1%, forex reserve grows in first month of current FY

 Kathmandu, Sept. 26

Consumer Price Inflation has significantly moderated in the first month of the current Fiscal Year 2024/25 compared to the same period in the last FY 2023/24.

The year-on-year CPI stood at 4.10 per cent in mid-August, 2024 against the 7.52 per cent a year ago, according to the latest report published by the Nepal Rastra Bank (NRB) on Thursday. The central bank has set the inflation target for this year at 5 per cent.

Food and beverage inflation stood at 6.17 per cent whereas non-food and service inflation stood at 2.94 per cent in mid-August this year. During the same period in the previous year, the price indices of these groups had increased by 8.90 per cent and 6.62 per cent, respectively.

The year-on-year price index of vegetable increased by 19.07 per cent, pulse and legumes by 12.09 per cent, cereal grains and their products by 9.15 per cent and milk products and eggs by 3.66 per cent while price of spices decreased by 2.75 per cent, said the NRB report.

Likewise, price index of miscellaneous goods and services increased by 7.94 per cent, alcoholic drinks by 5.38 per cent, clothes and footwear by 4.58 per cent and tobacco products by 3.52 per cent.

The inflation was slightly higher in the rural areas with 4.28 per cent rise than in urban ares of 4.03 per cent.

In case of the provinces, the year-on-year CPI in Koshi is 4.61 per cent, Madhesh 4.17 per cent, Bagmati 3.49 per cent, Gandaki 3.90 per cent, Lumbini 3.81 per cent, Karnali 3.46 per cent, and Sudurpashchim 6.69 per cent, informed the NRB.

Similarly, the CPI in the Kathmandu Valley, Terai, Hill and Mountain region surged to 3.62 per cent, 4.49 per cent, 3.67 per cent and 4.53 per cent respectively in mid-August this year. Inflation in these regions were 8.50 per cent, 6.70 per cent, 7.50 per cent and 11.46 per cent respectively a year ago.

Meanwhile, the central bank has updated the base year of the CPI to 2023/24 from 2014/15. The household expenditure weights used for this index are derived from the fourth Nepal Living Standards Survey (NLSS-IV), conducted by the National Statistics Office in 2022/23.

In the updated CPI, the weight for the food and beverage group is 35.49 per cent and for the non-food and services group is 64.51 per cent. The alcoholic drinks, tobacco products, and restaurants and hotels have been transferred to non-food and services group now from the food and beverages group.

"Price of 525 items is collected from weighted basket of 249 commodities to compute the price index. Of these, price of 59 items is collected weekly, 94 monthly, and 372 quarterly," informed the NRB.  

For price collection, 87 market centers have been selected across all 77 districts, including 28 from the Terai, 43 from the hill, and 16 from the mountain region. Among these, 21 are rural market centers and 66 are urban.

These market centers on provincial basis consists of 15 in Koshi, 12 in Madhesh, 16 in Bagmati, 11 in Gandaki, 13 in Lumbini, and 10 each in Karnali and Sudurpaschim.

 

Remittance inflows up

Remittance inflows increased by 18.0 per cent to Rs.136.93 billion in the first month of this year compared to an increase of 22.8 per cent in the same period of the previous year. However, in the US Dollar terms, remittance inflows reached 1.02 billion this year which was 879.8 million last year.

The number of Nepali workers, both institutional and individual, taking first-time approval for foreign employment stands at 36,928 and taking approval for renew entry stands at 22,647. Last year, such numbers were 39,152 and 16,423 respectively.

Likewise, the current account remained at a surplus of Rs.30.89 billion in mid-July to mid-August this year compared to a surplus of Rs.13.37 billion in the same period of the previous year.

Balance of Payments (BOP) remained at a surplus of Rs. 40.90 billion in the first month this year compared to a surplus of Rs. 36.43 billion in the same period of the previous year.

 

Forex Reserve up by 2.5 per cent

Gross foreign exchange reserves in Nepal increased 2.5 per cent to Rs.2092.22 billion in mid-August 2024 from Rs.2041.10 billion in mid-July this year. The share of Indian currency in total reserves stood at 22.6 per cent in mid-August.

Based on the imports of first month of 2024/25, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 16.7 months, and merchandise and services imports of 13.5 months. 

Published in The Rising Nepal daily on 26 September 2024.

No comments:

Post a Comment

Featured Story

Govt prepares primary draft of DRR Policy

Kathmandu, Apr. 29: The government has prepared the preliminary report of the National Disaster Risk Reduction (DRR) Policy and Strategic ...