The monthly report of Rashtra Bank has shown that the annual point consumer price increase (inflation) was 2.77 percent last May. In the same month last year, the rate of price increase was 4.40 percent.

On a monthly basis, last month's inflation rate was the lowest in 51 months. In January 2077, the rate of price increase was 2.70 percent. Since then, the rate of inflation has increased, reaching an average of 8.64 percent in August 079. The rate of price increase which has been decreasing from that point has come down to 2.77 percent last May.

Ramsharan Kharel, Head of Research Department of Rashtra Bank, said that currently, there is a decrease in the inflation rate of Nepal due to external rather than internal reasons. In the ten months of the current financial year, the import price index has decreased by 2.6 percent. In an import-based economy, the overall price growth has slowed down as the price of imports has fallen. In India, consumer price inflation has been continuously decreasing for the past five months and fell to 3.2 percent in April, he said, "Because India has open borders and open traffic, the price is affected by formal and informal trade." 

The price of crude oil in the international market has decreased by 20.7 percent during this ten-month period. Kharel said that as the price of petrol and diesel has continuously decreased in Nepal, the cost of transportation, transportation and operation of diesel-based machines is also decreasing. The Nepalese rupee has depreciated by 2.11 percent against the US dollar. He said that the effect of this has also been on the price of imported goods.

Compared to last year, this year there has been a gradual improvement in all sectors of the economy and the increase in production and supply has helped to lower the price increase. Last April, the price increase rate of food and beverages group was 1.52 percent and that of non-food and services group was 3.45 percent. In the same period last year, the rate of price increase of these groups was 6.41 percent and 3.09 percent, respectively, according to the report of Rashtra Bank. 

The annual point consumer price index of ghee and oil subgroup under the food and beverage group increased by 11.08 percent, fruits by 6.15 percent, pulses and pulses by 5.17 percent, and non-alcoholic beverages by 4.70 percent. But the price increase rate of vegetable sub-group has decreased by 8.11 percent, maramsala by 2.20 percent and fish and meat by 0.48 percent.

The annual point consumer price index of miscellaneous goods and services sub-group under the non-food and services group increased by 9.04, education by 5.88, clothing and footwear by 5.23, furnishing and household appliances by 3.99 and restaurant and accommodation services by 3.16 percent, the report pointed out. According to the

report, the average price increase in rural areas has increased by 3.21 percent and in urban areas by 2.61 percent. 

Provincially, the price increase rate is highest in Koshi province and lowest in Lumbini province. The average inflation rate of Koshi is 4.29, Madhesh 2.81, Bagmati 2.40, Gandaki 2.23, Lumbini 2.15, Karnali 2.21 and Far West 3.14 percent. Last May, the annual point consumer price growth rate of Kathmandu Valley is 2.64 percent, Terai 2.64, Hills 2.65 and Himals 4.01 percent. 

In recent months, the inflation rate has been continuously decreasing. The market demand has not increased and the interest rate is also continuously decreasing. Economists analyze the simultaneous decline in interest rates and inflation as a sign of economic recession. However, Rashtra Bank Research Department Head Kharel claimed that there is no recession in Nepal's economy due to external rather than internal reasons, including the fact that the inflation rate of Nepal has decreased, and that the internal economy is on the road to improvement.