Current account deficit soars to Rs 119.33bn
Kathmandu, January 17
A significant rise in the import bill amid slower growth in exports has pressurised the country’s current account lately, according to Nepal Rastra Bank (NRB).
The macroeconomic report of the country of the first five months of the current fiscal published by the central bank shows that the current account registered a deficit of Rs 119.33 billion in the first five months of fiscal 2018-19 following a whopping rise in import of merchandise goods against a deficit of Rs 64.11 billion during the same period in the last fiscal year.
As per NRB’s statistics, the country’s merchandise imports have increased by 34.2 per cent to Rs 607 billion in the first five months of this fiscal compared to an increase of 18.2 per cent during the same period in the last fiscal year. However, merchandise exports have increased by only 11.2 per cent to Rs 37.50 billion till mid-December in 2018-19 compared to an increase of 10.1 per cent during the same period in the last fiscal.
Among others, the import of commodities like petroleum products, vehicle and spare parts, aircraft spare parts, MS billet, machinery and parts, vegetables, fruits and rice, among others has increased in the review period this fiscal thereby raising the import bill.
As a result, the country’s total trade deficit has further widened by 36.1 per cent to Rs 569.49 billion in five months of fiscal 2018-19, as per NRB. Similarly, the export-import ratio has declined to 6.2 per cent in the review period from 7.5 per cent in the corresponding period of last fiscal year.
Rising import has also exerted pressure on the overall balance of payments (BoP) situation of the country as the BoP remained at a deficit of
Rs 85.32 billion in the review period compared to a deficit of Rs 5.48 billion in the same period of the previous fiscal year.
Meanwhile, the workers’ remittance has increased by 31.9 per cent to Rs 376.59 billion in the review period as against a decrease of 0.8 per cent in
the same period of the previous fiscal year.
The consumer price inflation stood at 3.7 per cent in mid-December 2018 compared to 4.2 per cent during the same period in the last fiscal year. The food and beverages inflation moderated to 0.5 per cent in mid-December while the non-food and service inflation stood at 6.3 per cent, according to NRB.