Kathmandu, March 16

In what could be considered an improving investment climate in the country, the Department of Industry granted approval to 199 joint venture projects with the foreign direct investment (FDI) commitment of Rs 8.41 billion in the first seven months of this fiscal, that is, from mid-July to mid-February.

According to the monthly report by Nepal Rastra Bank titled ‘Current Macroeconomic and Financial Situation of Nepal’ unveiled today, the FDI commitment amount is 24.3 per cent higher than the pledges of the previous year.

The approved projects are expected to generate direct employment opportunities for 5,785 people, as per the NRB report.

The central bank has said all three sectors of the economy — agriculture, industry and services —showed improved performance in the review period.

While the production of fruits and vegetables is expected to grow positively, contributing to the overall agricultural production, the improved power supply is expected to boost industrial production and enhance the industrial capacity utilization, as per the macroeconomic report.

The tourist arrival is picking up with the advent of mountaineering and trekking season. The average bed-occupancy rate was estimated at around 45 per cent in the review period.

Outstanding credit from the banks and financial institutions to the private sector increased 15.1 per cent in the review period. On year-on-year basis, such credit increased 32.9 per cent in mid-February 2017.

In the review period, consumer price inflation remained at 3.3 per cent on year-on-year basis. However, pressure in Indian inflation due to increase in crude oil price is likely to affect the inflation in the country in the coming months, the report said.

In the first seven months of 2016-17, merchandise exports increased 15.2 per cent to Rs 42.18 billion as against a drop of 27.1 per cent in the same period of the previous year. Merchandise imports increased 60.8 per cent to Rs 556.16 billion in the review period in contrast to a drop of 21.6 per cent in the same period of the previous year.

Consequently, the total trade deficit in the review period widened 66.2 per cent to Rs 513.98 billion as against a contraction of 20.9 per cent in the same period of the previous year. The export-import ratio was 7.6 per cent in the review period compared to 10.6 per cent in the corresponding period of the previous year.

The workers’ remittances increased 5.2 per cent to Rs 394.57 billion in the review period compared to a growth of 16.9 per cent in the corresponding period of the previous year. Hence, net transfer receipts increased 8.3 per cent to Rs 475.31 billion in the review period. Such receipts had increased 19.9 per cent in the same period of the previous year.

Foreign exchange reserves is at comfortable level, as per the central bank. In mid-February, gross foreign exchange reserves increased to Rs 1,077.47 billion, which is sufficient to cover the merchandise and service imports for 12 months.

There is an improving trend of government budgetary operations, NRB report showed. The government accumulated cash balance of Rs 201.6 billion at NRB in mid-February 2017 on account of the high revenue growth compared to the government expenditure.