In Kathmandu, the current economic and financial situation of Nepal has been publicly disclosed by the Nepal Rastra Bank, revealing that Koshi Province has the highest inflation rate in the country. According to the report, while the overall inflation rate in the country is at 5.1%, Koshi Province stands at 6.7% inflation. This indicates a concerning economic trend in the region.
Further analysis shows that in rural areas, consumer inflation has increased by 5.68%, whereas in urban areas, the Consumer Price Index has risen by 5.31%. The disparity in inflation rates between different regions is evident from the data provided by the Nepal Rastra Bank.
Looking at specific provinces, Koshi Province has the highest inflation rate at 6.73%, followed by Madhes Pradesh at 5.96%. Bagmati Pradesh stands at 5.14%, Gandaki at 4.3%, Lumbini at 4.83%, Karnali at 4.60%, and Sudurpashchim at 5.67%. These figures highlight the varying economic challenges faced by different regions of Nepal.
In terms of sectoral analysis, Kathmandu Valley has an annual consumer inflation rate of 5.03%, while Terai region stands at 5.60%. Similarly, the hilly region has a rate of 5.41%, and the Himalayan region at 5.27%.
The Nepal Rastra Bank’s data reveals that the Far Western region leads in terms of wage and salary indicators. The annual wage and salary index in the region has increased by 7.59%. In comparison, Madhes Pradesh ranks second with a 4.26% increase, followed by Lumbini at 3.27%, Karnali at 3.08%, and Gandaki at 2.70%. Koshi lags behind with a 1.30% increase in wage and salary index.
Regarding remittances and foreign currency reserves, the Nepal Rastra Bank report indicates a significant growth in remittances. The increase in remittances has been attributed to the rise in the exchange rate of the dollar. The total remittances received within the current fiscal year amount to NPR 7.63 billion, showing a 4.1% increase compared to the previous year.
In terms of foreign currency reserves, the report states that Nepal currently holds reserves worth NPR 231.84 billion. This reflects a 13.5% increase in foreign currency reserves compared to the same period last year.
As for interest rates in commercial and development banks, the Nepal Rastra Bank report reveals that the average interest rate on loans they extend stands at 8.69% as of Poush, 2081 BS. Furthermore, the report shows that the average interest rate on deposits in commercial banks was 4.75% in the same period, while development banks had an average rate of 5.56% and financial companies at 6.66%.
Opinion from Ramesh Khatri, representative of Kansai Nepal News:
“Ramesh Khatri from Kansai Nepal News views the economic data released by the Nepal Rastra Bank with concern. The disparity in inflation rates among provinces and regions indicates the need for targeted economic policies to address the varying challenges faced by different parts of the country. The increase in remittances is a positive sign, but it also highlights the country’s reliance on foreign income. Overall, a comprehensive approach is required to ensure sustainable economic growth and stability in Nepal.”
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Author: MAYA | HARUTO
Posted at: February 3, 2025 12:01 am