Himalayan News Service

Kathmandu, February 5

Government spending on the basis of cash flow data has increased by a rate of 6.2 per cent to Rs 24.7 billion in contrast to a decline of 1.9 per cent last year, according to the first five months of the current fiscal year 2003-04, stated a Nepal Rastra Bank report released here today.

Of the total expenditure, regular expenditure has gone up by 3.7 per cent to Rs 19.8 billion compared to an increase of 6.6 per cent last year, says a report released by the Nepal Rastra Bank (NRB).

Development expenditure rose by 15.2 per cent to Rs 3.4 billion in contrast to a sharp decline of 33.2 per cent last year. The freeze account, as against the decline of 12.7 per cent last year, marked an increment of 22.1 per cent to Rs 1.6 billion this year, says the NRB statement.

Total exports increased by 6.7 per cent to Rs 20.5 billion in contrast to a decline of 13.5 last year.

Exports to India, witnessing a reversal, increased by 8.5 per cent to Rs 11.4 billion in contrast to a decline of 23.1 per cent last year.

Exports to other countries, which had gone up by 2 per cent last year rose by 4.6 per cent to Rs 9.1 billion this year.

Exports of items like woollen carpets, pulses, jewelleries, Nepali paper and its products, handicraft and tanned skin, increased while that of Pashmina and readymade garments declined.

"Total imports increased by 15.2 per cent to Rs 54.7 billion compared to a rise of 7.7 per cent last year," according to central bank.

Imports from India rose by 11.2 per cent compared to a rise of 26.6 per cent last year, while imports from other countries went up by 20.6 per cent in contrast to a decline of 10.7 per cent last year.

Net foreign assets of the banking system (adjusting the foreign exchange valuation) rose by 0.7 per cent in contrast to a decline of 3.1 per cent in the previous year.

Domestic credit of the banking system increased by 1.5 per cent to Rs 231.8 billion compared to a growth of 4.3 per cent a year earlier. Credit to the private sector posted a growth of 4.3 per cent to Rs 157.4.

The 91-day average treasury bills rate rose to 3.85 per cent in mid-December 2003 from 2.98 per cent in Mid-July 2003.

According to the central bank, due to substantial surplus in the current account, the overall balance of payments (BoP) stood favourable.

The foreign exchange reserve reached Rs 110.9 billion, enough to cover merchandise imports of 10.1 months and merchandise and service imports for 8.8 months.

The national urban consumer price index, on a point to point basis, increased by 4.9 per cent compared to a rise of 2.7 per cent last year.

The index of food and beverages group also increased by 3.9 per cent compares to a rise of 1.7 per cent.

The report shows that revenue, the major source of government resources, went up by 15.3 per cent to Rs 20.3 billion compared to a slower growth of 5.1 per cent last year.

Revenue mobilisation improved mainly due to a rise in imports. Foreign grants went up substantial to Rs 1.1 billion as against just Rs 562.3 million mobilised last year.