A survey conducted by Nepal Rastra Bank (NRB), the central bank, shows that 95.7 percent of respondents expected price level to increase over the next one year while 86.6 percent of respondents expected price level to increase in next three months.

Nepal Rastra Bank (NRB) has released the results of Inflation Expectations Survey (IES) for the first quarter of FY 2022/23. The survey was conducted during October 9 to 15, 2022 among individual respondents from 60 market areas of 57 cities through field interviews.

The results are based on responses from 2,040 individuals, with additional 899 individuals in this survey compared to the number of individuals included in the previous survey.

The share of respondents expecting price increases in next three months has decreased from mid-July, 2022, while the share of respondents expecting price increase over the next one year has slightly increased.

The share of respondents expecting price increase in food and sub-group; non-food and services and it’s subgroup; and real estate (housing) during the next three months has decreased compared to that of mid-July, 2022.

The share of respondents expecting price increase in one year ahead across the entire food products, except for cereal grains, pulses, sugar and spices and non-food and services groups has decreased compared to mid-July, 2022.

Median inflation expectation for three months ahead and one year ahead has decreased compared to mid-July, 2022. Median inflation expectations for three months and one year ahead stands at 10.0 percent and 12.0 percent, respectively, the NRB stated.

This shows that individuals expect inflation to decrease in the near term and slightly increase in the medium term. Nepal Rastra Bank’s tight monetary policy stance has played a crucial role in anchoring inflation expectation in near and medium term.