Food, energy prices push Nepal inflation to near six-year high
Reuters
Published May 11, 2022 10:26AM ET
Updated May 11, 2022 10:45AM ET
By Gopal Sharma
KATHMANDU (Reuters) - Rising food and energy prices pushed Nepal's annual inflation to a near six-year high in the month ending mid-April, just as the economy was beginning to recover lost tourist dollars from the coronavirus pandemic.
Annual consumer price based inflation rose to 7.28% year-on-year from 7.14% the previous month, and from 3.10% a year earlier, data released by Nepal Rastra Bank showed.
Edible oil prices rose 28.36% followed by an 11.56% hike in prices of milk products, eggs and pulses from a year earlier - more than doubling food inflation to 7.4% within a year, data showed.
Nepal, landlocked between China and India, has banned luxury goods imports until mid-July and switched to a two-day weekend to cut fuel consumption amid dwindling forex reserves.
"Inflation is partly driven by global factors," said Prakash Kumar Shrestha, head of the NRB's Economic Research Department, adding that maintaining foreign reserves was a "challenge".
Forex reserves fell 18.2% to $9.61 billion as of mid-April from mid-July, enough to cover imports for about six months, NRB said in a statement, citing a rise in imports to near $12 billion in the first nine months of the year ending mid-July.
The rupee has depreciated by over 2% against the dollar since mid-July 2021, making imports costlier.
Inflation is a big headache for Prime Minister Sher Bahadur Deuba’s government which faces a national election by the end of the year.
Sky-high prices for crude oil, coal and edible oils in the wake of Russia's invasion of Ukraine have battered the economy which had gradually been recovering from the loss of tourist dollars during the pandemic.
"The cost of food items like rice, fruit, vegetables and cooking oil have spiked tremendously in recent months," said worker Saila Tamang in Kathmandu. "This has made living for common people very difficult."
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.