Kathmandu, September 1
The outflow of money from the country surpassed by Rs 67.4 billion in fiscal year 2018-19 owing to a rise in imports, which increased by 13.9 per cent to Rs 1,418.54 billion during the year.
As per the annual macroeconomic statistics of 2018-19 unveiled by Nepal Rastra Bank (NRB) today, the balance of payments (BoP) remained at a deficit of Rs 67.4 billion in the year compared to a surplus of Rs 960 million in the previous year.
The central bank’s data shows that imports increased 13.9 per cent to Rs 1,418.54 billion in the last fiscal year while merchandise exports increased 19.4 per cent to Rs 97.11 billion in 2018-19, thereby widening the total trade deficit by 13.5 per cent to Rs 1,321.43 billion in 2018-19. This trade deficit stands at 38.1 per cent of the country’s gross domestic product (GDP) value.
Meanwhile, the current account also registered a deficit of Rs 265.37 billion in the review year. Such deficit was Rs 247.57 billion in fiscal year 2017-18. Similarly, the country’s gross foreign exchange reserves decreased to Rs 1,038.92 billion as on mid-July 2019 from Rs 1,102.59 billion in the previous year. Of the total foreign exchange reserves, reserves held by NRB decreased to Rs 902.44 billion in mid-July 2019 from Rs 989.40 billion a year ago.
However, reserves held by banks and financial institutions (except NRB) increased to
Rs 136.47 billion in mid-July 2019 from Rs 113.19 billion a year ago.In the money supply front, the broad money (M2) supply rose 15.8 per cent in 2018-19 compared to 19.4 per cent in the previous year. Meanwhile, domestic credit expanded 20.1 per cent in the review year compared to a growth of 26.5 per cent in the previous year.
Claims on private sector increased 19.1 per cent compared to a growth of 22.3 per cent in the previous year. NRB’s statistics show that number of Nepali workers (institutional and individual-new and legalised) who migrated for foreign employment decreased by 32.6 per cent in the review year against a decrease by 9.3 per cent in the previous year. However, remittance inflows increased 16.5 per cent to Rs 879.27 billion in the review year compared to an increase of 8.6 per cent in the previous year.
The NRB has estimated the economy to have grown at 7.1 per cent in 2018-19 while inflation remained at 4.6 per cent on annual average.
A version of this article appears in print on September 02, 2019 of The Himalayan Times.