Growth in exports drops to 15.6 per cent
Kathmandu, November 5 :
Despite the efforts by both the private and public sector to boost Nepal’s exports, grwoth in exports continues to decline. The downward trend in export started from the last fiscal year. A massive decline in exports in the Nepali readymade garment is the main reason behind the sluggish exports growth, particulalry to the third countries. Nepal Rastra Bank (NRB), in its recent macro-economic report, has stated that though the country witnessed a rise of 15.6 per cent in total exports during the month of Shrawan. However, it is still behind tht total exports during the same period in the last fiscal, when it had recorded a growth of 22.5 per cent.
According to the central bank’s statistics, the total imports during the first month of the current fiscal has increased remarkably by 34.4 per cent. It had risen by only 5.8 per cent during the corresponding period in the fiscal 2004-05.
During the month of Shrawan, Nepal exported various goods worth about Rs 5.17 billion, whereas total imports exceeded the figure and stood at Rs 13.46 billion. Due to sharp increase in imports vis-a-vis exports, trade deficit during the month stood at Rs 8.30 billion.
According to NRB figures, Nepal’s exports had registered an increment of eight per cent during the fiscal year 2003-04 and almost the same level of about eight per cent to Rs 58.24 billion in 2004-05.
“Exports have not been able to achieve the expected growth,” says an official at NRB, adding that such a trend will affect the overall economy in the coming days.
Quota system phase out following the termination of multi-fibre arrangement (MFA) has hit the Nepali readymade garment exports hard, resulting in the slowdown in the overall foreign trade.
Nepal’s foreign trade had registered a growth of 9.1 per cent during 2003-04, while the trend slowed down and growth stood only at 0.1 per cent.
The central bank, however, has stated that Nepal’s exports to India has increased significantly during the last two fiscals. Total exports to India during the month of Shrawan recorded an increase of 23.1 per cent to Rs 3.37 billion.
Exports to India during the fiscal 2003-04 and 2004-05 had increased by 16.4 per cent and 28.2 per cent, respectively.
The share of total trade with India has declined marginally during the first month of current fiscal. Exports to India constituted 64.3 per cent last year, while it declined to 63.2 per cent during the review period.
The NRB official stressed the need of market diversification, stating that the single country concentration would not be beneficial for external trade in the long run.