Several news media have recently reported on Nepal Rastra Bank‘s latest macroeconomic update warning of a stagflation. Released on 16 Dec 2015, the report states that the four month long protest and blockade of the trade routes in the Terai-Madhesh region as the underlying factors that have resulted in soaring inflation rate, which stands highest at 10.4% in past three years.
The consumer prices have increased drastically and remains highest in Kathmandu valley at 11.8% (past four months-FY 2072/73) from 7.1% last year for the same period.
The government has already said that the economic growth would stand at 2 per cent this year due to the devastating earthquake and prolonged strikes in the southern belt. The central bank had made a forecast on 20 Nov 2015 of negative economic growth in the country.