Inflation Eases to 2.77% in Mid-May: NRB

The year-on-year (y-o-y) consumer price inflation in Nepal moderated to 2.77% in mid-May 2025 from 4.4% recorded a year ago, according to the latest update on the country’s macroeconomic and financial situation by Nepal Rastra Bank (NRB).

The central bank’s data—covering the period from mid-July 2024 to mid-May—showed that inflation in food and beverages slowed significantly to 1.52%, compared to 6.41% a year earlier. Non-food and services inflation edged up slightly to 3.45%, from 3.09% in mid-May last year.

Food and Beverage Inflation: Mixed Trends

Within the food and beverage category, prices of ghee and oil surged by 11.08%, followed by fruit (6.15%), pulses and legumes (5.17%), and non-alcoholic beverages (4.70%). On the downside, prices of vegetables declined sharply by 8.11%, while that of spices, and meat and fish fell by 2.20% and 0.48%, respectively.

Non-Food and Services Inflation

In the non-food and services category, the y-o-y price index rose most notably for miscellaneous goods and services (9.04%).

Similarly, inflation in the education, clothing and footwear, furnishings and household equipment and restaurant and accommodation services were 5.88%, 5.23%, 3.99% and 3.16%, respectively.

Rural-Urban and Provincial Inflation Breakdown

Rural areas experienced slightly higher inflation at 3.21%, compared to 2.61% in urban areas.

Provincially, Koshi recorded the highest inflation at 4.29%, followed by Sudurpashchim (3.14%), Madhesh (2.81%), Bagmati (2.40%), Gandaki (2.23%), Karnali (2.21%) and Lumbini (2.15%).

By region, the consumer price inflation rates rose 4.01% in mountains, 2.65% in the hills, and 2.64% each in the Kathmandu Valley and Terai.

Wholesale Prices Also Decline

Wholesale price inflation dropped to 3.95% in mid-May, a notable decrease from 5.68% a year ago.

According to the NRB, wholesale prices of consumer goods rose 10.89%, capital goods surged 2.73%, construction materials increased 2.67% and intermediate goods by 0.10%.