Remittance Soars 35% as Nepal’s Inflation Hits Record Low
NRB Q1 Report Highlights Surge in Remittances and Stabilized Prices in Fiscal Year 2025/26
Nepal’s economy is showing strong signs of stability and resilience, according to the latest macroeconomic report released by the Nepal Rastra Bank (NRB) for the first quarter of the fiscal year 2025/26. The highlight is the phenomenal growth in remittance inflows, which surged by a robust 35.4 percent to reach approximately Rs 553.31 billion (in NPR terms). This substantial increase, also reflected in USD terms, is primarily attributed to a growing number of Nepali workers seeking foreign employment and utilizing formal banking channels for transfers.
Simultaneously, the country witnessed a remarkable decline in overall Consumer Price Index (CPI) inflation. The average inflation for the first quarter dropped significantly to 1.67 percent, a sharp fall from 4.26 percent in the same period a year earlier. This low inflation rate, particularly the decline in the food and beverages category, signals a successful moderation of domestic prices.
The combined effect of soaring remittances and easing inflation has contributed to a widening Current Account surplus and boosted foreign exchange reserves, which now cover a comfortable level of prospective imports. While the economy still faces challenges like modest growth in private sector credit, the strong external sector indicators point to increasing financial stability for the Himalayan nation.
