Macroeconomic factors and relationship with the inflation in nepal

Abstract

This study looks at how different parts of Nepal’s economy like government spending, money supply, and imports affect the rising prices of goods and services, also known as inflation. By using past records and reports from Nepal Rastra Bank and the Ministry of Finance, the research finds that inflation is linked closely to how the government manages its income and spending, and how much money and credit are available in the economy. When government finances are handled well and the money supply is balanced, inflation tends to stay lower. But when spending rises quickly or too much money flows into the system, prices often go up. The study also shows that inflation is not just a local issue it’s influenced by outside factors like changes in India’s economy. To keep prices stable, Nepal needs better coordination between its fiscal and monetary policies, along with stronger long-term planning. This research gives helpful insights to policymakers working to reduce inflation and build a more stable economy. Keywords: Public Finance, Inflation, Macroeconomic