Price Hike Cools, Salary Increases

Salary and wages increased by double in comparison to the price hike in the second month of the current fiscal year.

According to Nepal Rastra Bank's (NRB) data of mid-September, overall year-on-year (yo-y) salary and wage rate index rose by 20.8 per cent but inflation moderated to 9.7 per cent.

The price hike was 13.5 per cent in the same period last year.

The price index of food and beverages group increased by 16.3 percent. Similarly, the index of non-food and services group rose only by 2.1 percent. The index of food and beverages and non-food and services group rose by 14.2 per cent and 12.8 per cent, respectively, last year.

Rise in prices of vegetables and fruits contributed to the price hike as their indices increased by a whopping 43.5 per cent -- in sharp contrast to a decline of 14.6 per cent in the same month last year. Similarly, the price indices of sugar and sugar related products also increased by 40.5 per cent in comparison to an increase of 38.9 per cent during last year's same month, said the NRB.

The price index of meat, fish and eggs has doubled to 29 per cent against an 14.5 per cent increase in same period last year.

However, the grains and cereal products subgroup witnessed an increment of 5.8 per cent against a 23.8 per cent hike in the same month last year. The price index of transport and communication declined by 8.7 per cent against the increase of 23.1 per cent in same month last year.

Region-wise, the Tarai was the most expensive as the price index there rose by 9.9 per cent followed by 9.6 per cent in Kathmandu Valley and 9.4 per cent in the hills. The respective rates were 13.5 per cent, 14.1 per cent and 12.7 per cent last year.

The y-o-y core inflation rose to 10.9 per cent from 12.1 per cent a year ago, said the report.

However, the overall y-o-y salary and wage rate index rose by 20.8 per cent in comparison to a rise of 9.1 per cent a year ago. "The salary index increased by 32.8 per cent due to increase in basic salary and allowances for civil servants," said NRB. The wage rate index increased by 17.1 per cent compared to an increase of 12.3 per cent in the same month last year.

Wages of agricultural, industrial and construction labourers increased by 18.1 per cent, 15.8 per cent and 16.4 per cent respectively against increase by 19.5 per cent, 2.7 per cent and nine per cent, respectively, in the same month last year.