Govt taking steps to address rising trade deficit
Kathmandu, December 18
The government has been preparing a national work plan to address the ballooning trade deficit of the country.
The Ministry of Industry, Commerce and Supplies (MoICS) has prepared a draft of the work plan incorporating necessary measures to control imports and boost the export of domestic products. “We have been finalising the draft of the work plan and will send it to the Cabinet soon for approval,” informed a source at MoICS.
As per statistics of the Trade and Export Promotion Centre, the country exported goods worth Rs 29.28 billion in the first quadrimester of fiscal year 2018-19 while imports stood at Rs 483.75 billion, resulting in a trade deficit of Rs 454.47 billion.
The new work plan of MoICS is expected to primarily impose quantitative restrictions on import of different goods, especially luxury goods like vehicles and introduce a few other measures to boost the country’s production base and address various export hurdles.
As the significant rise in imports has been exerting pressure on the country’s current account, it has worried the government lately. As per the statistics of Nepal Rastra Bank, imports in the first three months of the ongoing fiscal year have gone up by 43.6 per cent to Rs 373.59 billion as compared to a rise of 17.9 per cent in the same period of the previous fiscal year.
Owing to the rising import, the current account registered a deficit of Rs 81.96 billion in the review period against a deficit of Rs 25.52 billion recorded during the same period in the previous fiscal year. As a result, the overall balance of payments (BoP) remained at a deficit of Rs 35.42 billion in the review period in contrast to a surplus of Rs 4.27 billion in the same period of the previous fiscal.