KATHMANDU, JANUARY 13
The latest macroeconomic update unveiled by the Nepal Rastra Bank (NRB) today revealed gradual economic recovery, with improvements in remittance inflows, balance of payments and gross foreign exchange reserves and narrowing trade balance.
The remittance inflows surged 23 per cent to Rs 480.50 billion in the first five months of the current fiscal year (mid-July to mid-December) against a decrease of 6.3 per cent in the same period of the previous year.
Total trade deficit narrowed by 18.8 per cent to Rs 597.44 billion during the five months of 2022-23. Such deficit had jumped by 54.7 per cent in the corresponding period of the previous year.
During the five months of 2022-23, merchandise imports slumped by 20.7 per cent to Rs 664.75 billion against an increase of 59.5 per cent a year ago. But worryingly, the merchandise exports also plunged by 34.6 per cent to Rs 67.30 billion against an increase of 105.6 per cent in the same period of the previous year.
As per the broad economic categories (BEC), the intermediate and final consumption goods accounted for 53.4 per cent and 46.5 per cent of the total exports respectively, whereas the ratio of capital goods in total exports was negligible at 0.05 per cent in the review period.
In the same period of the previous year, the ratio of intermediate, capital and final consumption goods had stood at 47.1 per cent, 0.02 per cent and 52.9 per cent of total exports respectively.
On the imports side, the share of intermediate goods was 53.1 per cent, capital goods nine percent and final consumption goods remained at 38 per cent in the review period. Such ratios were 53.8 per cent, 10.9 per cent and 35.4 per cent, respectively, in the same period of the previous year.
Balance of Payments (BoP) - the difference between all money flowing into the country in a particular period of time and the outflow of money to the rest of the world - remained at a surplus of Rs 45.87 billion in the review period compared to a deficit of Rs 195.01 billion in the same period of previous year.
Meanwhile, the current account - country's imports and exports of goods and services, payments made to foreign investors, and transfers such as foreign aid - recorded a deficit of Rs 37.91 billion in the review period compared to a deficit of Rs 298.51 billion in the same period of the previous year.
The gross foreign exchange reserves increased three per cent to $9.82 billion in mid-December, 2022 from $9.54 billion in mid-July, 2022.
Based on the imports of five months of 2022-23, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 10 months, and merchandise and services imports of 8.7 months, as per the central bank report.
A version of this article appears in the print on January 14, 2023, of The Himalayan Times.
