Remittance surges, trade deficit narrows, foreign exchange reserves soar
KATHMANDU, AUGUST 18
The Nepal Rastra Bank (NRB) has released its latest macroeconomic update, highlighting a gradual economic recovery in the country.
The report showcases positive developments across various sectors, including remittance inflows, balance of payments, gross foreign exchange reserves, and a reduction in the trade deficit.
Remittance inflows exhibited remarkable growth, surging by 21.2 per cent to Rs 1,220.56 billion during the fiscal year 2022-23, a substantial improvement compared to the 4.8 per cent decline observed in the corresponding period of fiscal 2021-22.
Meanwhile, the current account, which encompasses the country's imports and exports of goods and services, foreign investor payments, and transfers like foreign aid, recorded a deficit of Rs 72.16 billion during the review period. This marks an improvement compared to the Rs. 623.38 billion deficit in the previous year.
The gross foreign exchange reserves saw a noteworthy increase of 23.1 per cent, reaching $11.73 billion in mid-July this year, up from $9.54 billion in mid-July 2022.
During 2022-23, merchandise exports decreased 21.4 per cent to Rs 157.14 billion against an increase of 41.7 per cent in the previous year. Meanwhile, merchandise imports decreased 16.1 per cent to Rs 1,611.73 billion against an increase of 24.7 per cent in the fiscal 2021-22.
Thus, the total trade deficit decreased by 15.5 per cent to Rs 1,454.59 billion in the review year. Such a deficit had surged by 23 per cent in the previous year. The export-import ratio decreased to 9.7 per cent in the review year from 10.4 per cent in the previous year.
Considering 12-month import data for 2022-23, the foreign exchange reserves of banking sector are deemed sufficient to cover prospective merchandise imports for 11.7 months and both merchandise and services imports for 10 months.
A version of this article appears in the print on August 19, 2023, of The Himalayan Times.
