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Kathmandu Friday December 14, 2001 Marga 29, 2058.
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Inflation
remains low at 2.2 percent
Post Report
KATHMANDU, Dec 13 - With the
inflation rate of 2.2 per cent, Nepalese economy continues to enjoy low price rise -
thanks mainly to dwindling food prices and housing that helped to drag down the whole
price index.
According to the statistics
of Nepal Rastra bank, during the first quarter of the current fiscal year, the National
Urban Price Index (NUPI) with 1995/96 as the base year, registered a low increment of just
2.2 per cent as compared to 2.9 per cent recorded in the corresponding period last year.
During the period, food and
beverages items, which commands 53.20 per cent weight in the NUPI, registered a surge of
3.8 per cent against the deflation of 4.6 per cent witnessed in the same period last year.
Among the major components of the group, grains and cereals products registered a marginal
deflation of 1.6 per cent as opposed to a double-digit deflation of almost 14.5 per cent.
Since grains and beverages alone holds 18 per cent weight in the overall index, any
decline in its index largely helps to pull down the whole index by suppressing price
increments of goods with low weight.
The low price of paddy due to
combined effects of bumper domestic production and huge flow of cheap Indian rice played
the crucial role for deflationary pressure on the grains and cereals group hurting poor
peasants, whose economic activities heavily depends upon the income of monsoon crops.
The plunging income of
majority farmers due to the prolonging paddy price slump has one of the prime causes for
the lowering demand of goods and services in recent months. Reports of record-low sells,
particularly in the district level business centers, have already started emerging
creating a serious threat for the much-needed development of non-agriculture sector to
observe ballooning unemployment.
Similarly, the prices of
sugar and sugar related products recorded the highest rise of 13.5 per cent against a
surge of 8.3 per cent during same period last year. The heavy scarcity of the sugar during
Dashain, the greatest festival of Nepali people, helped the price go up.
In the like manner, the price
of vegetables and fruits also recorded a relatively higher price rise of 9.7 per cent
while the price of oil and ghee also went up by 9.2 per cent against a decline of 14 per
cent last year. Similar increments were also recorded for restaurant meals, pulses and
milk and milk products.
Similarly, the non-food and
services group, which bear 46.80 per cent weight in the national price index, registered a
nominal increment of 0.4 per cent mainly due to the double-digit deflation in the prices
of fuel, light and water - largest weight holder of the group. During the period, the
price of the sub-group plunged by over 13 per cent mainly due to the slump in the prices
of housing.
Prices of medical and personal
care also rose by 4.4 per cent, which is less than the increment witnessed during the same
period last year. Similarly, clothes, clothing and sewing services, education and reading
materials also registered marginal increments of 3.2 per cent and 1.2 per cent against 1.3
and 14 percent seen last year.
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