Consumers expect inflation as high as 12%, says Inflation Expectation Survey

In the second quarterly ‘Inflation Expectations Survey’ (IES) by the Nepal Rastra Bank (NRB) for the fiscal year 2022-23, respondents expected that price rise will reach a new high of 12% within a year.

IES was conducted during 8-14 Jan 2023 among 2,010 individual respondents from 60 market areas through field interviews.

NRB began IES in Jan 2021 surveying inflation expectations considering the importance of expectation in economic decision-making.

92.3% of the respondents expect the price level to increase over the next year.
The median inflation expectations for one year ahead stand at 12%.

Similarly, 84.6% of respondents expect the price level to increase in the next three months.
The median inflation expectations for three months stand at 10%.

The government had a target to limit inflation to 7% this fiscal year as stated in the budget program.

However, the y-o-y consumer price inflation (CPI) remained at 7.26% in mid-January 2023 compared to 5.65% a year ago.

‘Food and beverage’ inflation stood at 5.62% whereas ‘Non-food and service’ inflation rose to 8.57% in the review month.

Under the food and beverage category, the y-o-y CPI of the ‘Restaurant and hotel’ sub-category increased by 15.56%, ‘Tobacco products’ by 11.81%, ‘Milk products and eggs’ by 9.70%, ‘Cereal grains and their products’ by 9.56% and ‘Alcoholic drinks’ 8.84%.