Tuesday, March 20, 2012

Food weight in overall CPI in Nepal

The weight of food in CPI is 42 percent in Nepal, which means higher food prices would affect food security and exert upward pressure on inflation. The NRB figures show that food and beverage has 46.82 percent weight in CPI in fiscal year 2010/11.The NLSS III shows that 61.5 percent of household budget is spent on food (up from 59 percent in 2003/04).  Controlling food prices and ensuring food security is good for overall CPI and development. Now, what is the government doing about it?

The table below shows comparable food weights in CPI figures.

Food Weights in CPI (%)
Afghanistan 61
Bangladesh 58.8
Bhutan 31.7
India 46.2
Maldives 33.3
Nepal 42
Pakistan 40.3
Sri Lanka 45.5

Bangladesh has the highest food weight in CPI (Bhutan has the lowest) in the region. Here is the source (see Table 8, p.19).