Home NewsEconomy News Food, energy prices push Nepal inflation to near six-year high By Reuters

Food, energy prices push Nepal inflation to near six-year high By Reuters

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Food, energy prices push Nepal inflation to near six-year high By Reuters

© Reuters. FILE PHOTO: A foreign tourist takes pictures in front of the Nyatapola Temple in Bhaktapur, Nepal, on April 24, 2022. Photo taken on April 24, 2022. REUTERS/Monika Deupala

by Gopal Sharma

KATHMANDU (Reuters) – Rising food and energy prices pushed Nepal’s annual inflation rate to its highest level in nearly six years, in the month to mid-April, just as the economy began to recover lost ground from the coronavirus pandemic. of tourism revenue.

Annual inflation based on consumer prices rose to 7.28% from 7.14% last month and 3.10% a year earlier, data released by Nepal Rastra Bank showed.

Edible oil prices rose 28.36%, followed by 11.56% rises in dairy, eggs and soy prices from a year earlier – food inflation more than doubling to 7.4% in a year, the data showed.

Nepal, a landlocked country between China and India, banned luxury imports until mid-July and switched to a two-day weekend to cut fuel consumption amid dwindling foreign exchange reserves.

“Inflation is partly driven by global factors,” said Prakash Kumar Shrestha, head of economic research at the NRB, adding that maintaining foreign reserves was a “challenge”.

As of mid-April, foreign reserves fell 18.2% from mid-July to $9.61 billion, enough to cover about six months of imports, the NRB said in a statement, citing an increase in imports to nearly $12 billion in the first nine months of the year7 Ends mid-month.

The rupee has depreciated more than 2 percent against the dollar since mid-July 2021, making imports more expensive.

Inflation is a big problem for Prime Minister Sher Bahadur Deuba’s government, which is due to hold national elections before the end of the year.

Sky-high prices for coal and cooking oil hit the economy after Russia’s invasion of Ukraine, which has gradually recovered from the loss of tourist dollars during the pandemic.

“The prices of food items such as rice, fruits, vegetables and cooking oil have risen sharply in recent months,” said Saila Tamang, a worker in Kathmandu. “It makes life very difficult for ordinary people.”

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