The annual rate of inflation in Nepal has come down to 3.75 per cent in mid-March 2025 against 4.82 per cent a year ago.

Food and beverage inflation stood at 3.34 per cent, whereas non-food and service inflation stood at 3.97 per cent in the review month. During the same period in the previous year, the price indices of these groups had increased 5.95 per cent and 4.07 per cent, respectively, the Nepal Rastra Bank (NRB)’s monthly report on economic and financial situation stated.

Under the food and beverage category, year-on-year price index of ghee and oil sub-category increased by 13.74 per cent, pulses and legumes by 7.80 per cent, fruits by 6.82 per cent and non-alcoholic drinks by 5.15 per cent. Likewise, the price index of the spices sub-category decreased by 5.17 per cent, vegetable by 1.24 per cent, and meat and fish by 0.74 per cent.

Similarly, under the non-food and services category, the y-o-y price index of miscellaneous goods and services sub-category increased by 10.14 per cent, clothes and footwear by 7.01 per cent, alcoholic drinks by 6.07 per cent, furnishing and household equipment by 5.59 per cent, and transportation by 5.07 per cent.

During the review month, y-o-y price index in rural areas increased by 4.18 per cent while in urban areas, it rose by 3.60 per cent.

Remittance inflows up by 9.4%

Remittance inflows increased by 9.4 per cent to Rs. 1051.77 billion in the first eight months of the current year compared to an increase of 18.3 per cent in the same period of the previous year.

The number of Nepali workers, both institutional and individual, taking first-time approval for foreign employment stands at 317,068, and taking approval for renewed entry stands at 217,403. In the previous year, such numbers were 285,352 and 182,783 respectively.

The current account remained at a surplus of Rs. 180.08 billion in the review period compared to a surplus of Rs. 167.45 billion in the same period of the previous year. Likewise, net capital transfer amounted to Rs. 6.41 billion this year compared to Rs. 3.89 billion last year.

Likewise, Balance of Payments (BOP) remained at a surplus of Rs. 310.37 billion in the review period compared to a surplus of Rs. 327.55 billion in the same period of the previous year.

Foreign exchange reserves increase

Meanwhile, gross foreign exchange reserves increased 18.0 per cent to Rs. 2409.25 billion in mid-March 2025 from Rs. 2041.10 billion in mid-July 2024. In US dollar terms, the gross foreign exchange reserves increased 13.1 per cent to 17.27 billion in mid-March 2025 from 15.27 billion in mid-July 2024.

Based on the imports of eight months of 2024/25, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 17.2 months and merchandise and services imports of 14.3 months.