Kathmandu, February 2:

Except for price hike and spending on developing activities, Nepal Rastra Bank (NRB) has painted a rosy picture of the country’s economy.

The current macro-economic report of the central bank based on first five months of the current fiscal said, the government collected revenue according to its target, exports are increasing and the Balance of Payment (BoP) is surplus.

However, the government totally failed to control price rise which stood at 14.1 per cent in mid-December 2008 from 5.7 per cent in the same period last fiscal.

“Revenue mobilisation grew by 33.1 per cent to Rs 43.1 billion compared to an increase of 21 per cent in the same period the last fiscal,” said the central bank’s report.

The revenue growth is attributed to high growth of income tax, VAT revenue, excise, vehicle tax and registration fee as well as high growth in non-tax revenue. But capital expenditure declined by 34.3 per cent to Rs 4.9 billion in contrast to an increase of 120.3 per cent in the first five months of last fiscal year, said the bank.

In the first five months of 2008-09, the government budget remained at a surplus of Rs 2.2 billion in contrast to a deficit of Rs 9.8 billion in the corresponding period the previous year. An increase in revenue and foreign cash grants accounted for such a budget surplus in the review period.

During the period, the total government spending increased by 2.5 per cent to Rs 48.5 billion compared to an increase of 44.3 per cent in the same period last fiscal year.

Similarly, exports rose by 30.9 per cent during the period in contrast to a decline of 4.4 per cent last year. “Exports to India increased by 15.1 per cent as against a decline by nine per cent in the same period last fiscal year,” it said adding that exports to other countries also soared by 64 per cent compared to an increase of 6.9 per cent.

Total imports also went up by 32.6 per cent in comparison to an increase of 8.2 per cent in the same period. Imports from India increased by 17.1 per cent in the review period against a growth of 10.7 per cent in the same period of 2007-08. “Imports from other countries have surged by 57.2 per cent compared to 4.5 per cent a year earlier,” the data revealed.

Overall balance of payment (BoP) saw a surplus of Rs 22.8 billion compared to a surplus of Rs 31.1 million the last fiscal. Remittance soared by 65.8 per cent in the first five months against a growth of 17.6 per cent in the same period last fiscal year.

The gross foreign exchange reserve also is in a comfortable situation. “It stood at Rs 235.6 billion by mid-December with an increment of 10.8 per cent compared to the level as at mid-July 2008,” the report said.