Nepal | July 13, 2020

Inflation at 6.87pc in mid-February

Himalayan News Service
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Kathmandu, March 18

Against the government’s plan to tame inflation below six per cent in the ongoing fiscal year, the consumer price inflation stood at 6.87 per cent in mid-February compared to 4.35 per cent a year ago.

As per the ‘Current Macroeconomic and Financial Situation of Nepal’ report of the first seven months of 2019-20 (mid-July to mid-February) released by Nepal Rastra Bank (NRB) today, the overall inflation came under pressure amid rise in food and beverage inflation.

The food and beverage inflation stood at 9.79 per cent in mid-February, while non-food and service inflation stood at 4.65 per cent. In the review month, the Kathmandu valley witnessed inflation of 7.58 per cent.

The NRB report shows that the total trade deficit narrowed down 5.3 per cent to Rs 738.63 billion in the seven months of this fiscal. Such deficit had expanded by 27.1 per cent in the same period of previous year.

In the review period, merchandise exports rose by 22.4 per cent to Rs 64.97 billion against an increase of 12.5 per cent during the same period a year ago. However, merchandise imports decreased 3.6 per cent to Rs 803.6 billion against an increase of 26 per cent in the same period of previous year.

As the result of rising export, the balance of payments (BoP) remained at a surplus of Rs 21.61 billion in the review period against a deficit of Rs 49.32 billion in the same period of the previous year. However, the current account registered a deficit of Rs 112.15 billion in the review period. Such deficit was Rs 166.67 billion in the same period of the previous year.

Meanwhile, the inflow of remittance has come down despite the surge in outflow of migrant workers.

As per NRB, the number of Nepali workers (institutional and individual-new and legalised) that migrated for foreign employment surged by 21.7 per cent in the review period against a slump of 37.5 per cent in the same period of the previous year. However, remittance inflows fell by 0.5 per cent to Rs 513.21 billion in the review period against the increase of 28.5 per cent in the corresponding period of the previous year.

A version of this article appears in print on March 19, 2020 of The Himalayan Times.

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