|
Economy
Price and Supply Situation
National Urban Consumer Price (NUCPI) Index
Point-to-point analysis of NUCP index for the first 8 months (review period) of the current year at FY1995-96 price
indicated a rise of 0.1% compared to a drop by 0.01% during the review period of the last year. In the review period of
this year, the price index increased by 3%, which is higher than the rise in price index by 2.1% during the corresponding
period last year. In the review period price index of food and beverages rose by 3.9% and that of non-food and service by
1.9%. Region wise, the Consumer Price Index for Terai rose by 0.4% as opposed to a fall of 1.6% last year but in the Hills
and Kathmandu Valley, indices dropped by 0.6% and 0.2% respectively during the review period of this year whereas those
indices had increased by 3.3% (Terai) and 0.4% (Kathmandu Valley) last year.
Level of food grain production remained constant during the review period of this year. Price index, also in point-point
term, for all the commodities slided up by a margin of 0.1% attributable to increased production of cash crop, regularity
in the supply of essential goods, sizable squeeze in the expansion of broad money supply and a gradual improvement seen in
the Indian Wholesale Price index and also due to comfortable level of food grain production in India. Prices, on the whole,
rose very marginally during the review period, notwithstanding the fact that the prices of non-food and services group
remained under some pressure (para.3.7). Otherwise, the prices of most of the items under food and beverages group
registered a drop (Para 3.3) while those for items under education; educational materials and entertainment group
phenomenally dropped (Para. 3.9).
Food and Beverage
The price of food and beverage group decreased by 1.9 during the review period of this year compared to 5.8 % decrease last
year. Prices of food grains and associated items like meat, fish, eggs, oil and butter, beverages and snacks, which carry a
greater weight of the basket, were under some pressure compared to a precipitous fall of 14.7% last year. Those of
vegetables, fruits, lentils, spices, milk and milk product and sugar under this group were seen falling in this period.
The price of lentils dropped by 1.7%in the review period of FY 2000/01, where as it dropped by a margin of 0.8% during this
review period due to satisfactory production and supply situation both in India and Nepal. Prices of vegetables and fruits
continued to fall from 18.4% during the review period of the last year to 19.9% this year. Increased production of potatoes
and onion as major items under this sub-group both in Nepal and India and also the regular supply of important seasonal
vegetables and fruits had contributed to the fall in prices. Similarly, spices sub group also saw downslide by 2.9%
compared to an increase of 0.7% in previous year mainly due to improvement in prices of locally produced items like garlic,
chilly, etc. and noticeable price-fall of imported spices like cumin seed and black pepper.
The price of meat, fish and egg increased by 1.2 % in the review period of this year as against the increase of 1.8% last
year. Reduced supply of live goats from the hills and the Terai, increase in price of animal feed and the consequent
pressure on price of poultry compared to that of the last year were the main contributors to the price rise observed during
this year. Prices of dairy products decreased by 1.1% due to encouraging level of milk production in the Terai, which
helped improve supply situation. The price of oil and ghee, however, increased by 2.9% compared to the fall by 1.4% last
year. Increase in production cost of mustard, which pushed price of oil and the sizable export of vegetable ghee and oil to
India both contributed to the rise in price.
The price of sugar and sweets also followed the suit with a decrease in their prices by 3.6% this year contrary to an
increase of 7.6% registered last year. Better production of sugar than that of the last year and the import of 40,000
metric tons of sugar by the National Trading Ltd. to buttress the supply helped lower the price. In addition, the decrease
in price of brown sugar (Chaku) also had the combined effect on decreasing price of this sub group this year. Price of
beverages hiked further by 4.6% from 2.2% of last year. During this year, the price of imported horlicks was hiked while
the change in excise duty by the govt. on soft drinks like Coca-Cola and Fanta, as well as alcohol and beer also
contributed to the increase in their prices. The price of food and snacks served in restaurants also went up by 2.4%
compared to 7.5% increase during the review period of the last year due to the increase of prices of beverages, goat meat,
poultry, oil and Ghee.
Non-Food Commodities and Services
The price of items under this category increased by 2.0% during the review period this year compared to 6.5% last year.
Except Education, Education materials and Entertainment sub-group, increase in prices of all other items under this category ranged between 0.1% and 6.0% compared to 0.8% to 14.3% increase in the previous year. The price of clothing materials and
ready-made garments sub-group went up by 2.1% due to some price increase hi imported clothes and ready-made garments and
increased cost of stitching compared to 2.7% increase last year. Price of footwear sub- group also increased by 1.0% as
against 0.8% increase last year due to the price hike by the manufacturers and increased price of shoe polish.
The price of household goods sub-group increased by 2.5% compared to an increase of 7.6 % last year. Increase in prices of
drinking water, imported household goods as well as house rent contributed to this year's price rise. The price of transport and communication, which increased by 6.9% in the previous year, was increased by 0.1% only during the review period of
this year. Marginal increase is attributable to 5% surcharge on telephone tariff levied by government. The price of
medicine and personal hygiene sub- group increased by 6.0% against 4.3 % increase last year due to price increase in
imported medicine from India coupled with fee of doctors as well.
The price of education, educational materials and entertainment sub- group which spiraled by 14.3% last year plummeted to
1.5% decrease within the review period this year largely due to cuts in tuition fees in the government funded schools. The
price of cigarettes subgroup increased by 4.2% compared to 0.8% increase last year as the excise duty on tobacco products
were revised upwards by the government.
| 
