Economy

Double-digit inflation bleeds Nepalis

Published by Octron on September 15, 2009

If consumers were paying Rs. 40 for a kilogram of sugar on average in the fiscal year 2007/08, they paid Rs. 60 in the last fiscal year 2008/09. Consumers who paid Rs. 1000 for 30 kg of rice in the fiscal year had to pay Rs. 172 in the last fiscal year. Sugar and related products witnessed a price rise of 49.9 percent whereas rice saw a price rise of 14.3 percent, according to the annual macro-economic situation of the country in the fiscal year 2008/09 made public by Nepal Rastra Bank on Sunday. As inflation retained double-digit growth through the entire year from 13.1 percent in August 2008 to 11.4 in July 2009, consumers’ lives have become difficult with most of their income being spent on consumption and savings seeing a decline.

With expenditure on consumption reaching as high as 92 percent, savings remained at 8 percent of the gross domestic product. Senior economist Bishwombher Pyakuryal said that continued double-digit inflation would have an impact on food security and could lead to under nutrition as people didn’t have enough money to spend on good foods. Although salary and wage rates also increased by 15.3 percent, Pyakuryal said that it did not make any difference to the overall living standard of living given that wages had not gone up in the informal sector. The high inflation in foods and beverage category pushed the overall inflation up although non-food items also saw a significant rise in inflation. Besides sugar and rice, prices of pulses and meat products went up by 25 and 23.4 percent respectively in the last fiscal year.

The prices of oil and ghee went up by 16.3 percent and milk and milk products by 15 percent. Restaurant goers had to spend 18.5 percent more money for meals. Among non-food items, prices of transport and equipment saw the highest rise of 15.8 percent followed by tobacco and related products with 15.8 percent. The price rise of non-food items remained at 9.5 percent in the last fiscal year.

Inflation (2008/09): Aug (13.1pc), Sept (13.5pc), Oct (14.1pc), Nov (14.5pc), Dec (14.1pc), Jan (14.4pc),
Feb (13.7pc), Mar (13.1pc), Apr (11.9pc), May (12.9pc), Jun (12.3pc), Jul (11.4pc).

Source: Kantipur

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