Nepal’s inflation rate declined sharply to 1.11 percent by mid-November, marking the lowest level in 22 years, according to Nepal Rastra Bank (NRB). This represents a significant drop from 5.60 percent during the same period last year. Economists attribute the decline to a weakening global economy, India’s low inflation rate of 0.71 percent combined with Nepal’s fixed exchange rate, and falling global prices of commodities such as lentils and pulses. A major contributing factor is subdued domestic demand caused by sustained outmigration, as large numbers of Nepalis leave for foreign employment or migrate to India. Food and beverage inflation dropped by 3.32 percent due to lower vegetable, spice, and pulse prices, while non-food and services inflation stood at 3.69 percent. Inflation was highest in Koshi Province at 1.80 percent and lowest in Sudurpashchim Province at 0.26 percent.
