Inflation likely to touch double digit

KATHMANDU, MAR 11:

Economists and consumer rights activists have said that the recent hike in transport fares will help increase inflation to a double digit figure in the coming months. At present, inflation is at around 9.8 per cent, according to Nepal Rastra Bank’s report for the first six months of fiscal year 2012-13.

“Inflation will touch double digit,” said economist Dr Chiranjivi Nepal, adding that there is a chance of food prices increasing by at least two per cent in the coming months. The growing political turmoil is a fertile ground for black marketers, so there will be significant price hike in essential goods in the coming months.

Generally, food price hike in the country starts from April and the trend continues till November — the yielding season of major cereal crop paddy. Experiences have shown that food prices skyrocket between August and October due to high demand in Dashain and Tihar. Food prices had increased by 9.6 per cent in mid-January 2013 as compared to 6.8 per cent a year back. Non-food and service sector had 10.2 per cent growth according to the central bank’s data.

The season for food price hike is coming, and there is a chance of a big hike this year, said consumer activist of Forum for Protection of Consumer Rights-Nepal Bimala Khanal. “Yet, regulating agencies have not woken up,” she said. She opined that due to the ineffective market monitoring drives of the regulating agencies, price hike cannot be controlled this time. Consumers will suffer from the price hike, she said, adding that regulating agencies must be effective about controlling artificial hike.

Artificial price hike is a major problem in transitional countries and Nepal is currently in the process. “Therefore, regulating agencies must be effective,” said Nepal. But, in principle, transition also affects regulating agencies and makes them inefficient.

In July 2008-09, price of consumer goods had gone up to a record high of 17.4 per cent due to food shortage, hoarding and black-marketing. Price hike was 11.3 per cent in the July-September period in 2011.

Source: THT