Nepal’s central bank has warned that inflation could rise slightly during the upcoming election period due to increased economic activity. According to the bank’s mid-year review of the 2082/83 monetary policy, while current inflation remains low, factors such as growing remittance inflows and expanded spending during election campaigns are expected to boost overall demand, putting upward pressure on prices.
The government’s mid-year budget review predicts economic growth of just 3.5 per cent for the current fiscal year. The central bank notes that low interest rates, ample liquidity in the financial system, and sufficient foreign reserves provide a strong foundation for investment-led growth. These conditions could support sustainable and broad-based economic expansion despite election-driven spending.