Remittances come handy again
Himalayan News Service
Kathmandu, January 21
A sharp rise in private remittances has resulted in a current account surplus that has helped to see favourable balance of payments (BoP) during the first four months of the current fiscal year 2003-04.
According to a Nepal Rastra Bank (NRB) press statement issued here today, total exports during the period increased by eight per cent to Rs 15.5 billion in comparison to a decline of 17.3 per cent last year. Exports to India, reversing the old trend, increased by 9.7 per cent to Rs 8.4 billion in comparison to a decline of 26.8 per cent last year.
Exports to other countries, which had declined by 2.7 per cent last year, increased by six per cent to Rs 71 billion this year during the same period, states the press statement. Export of pulses, handicraft, tanned skin, Nepali paper and its products and woolen carpets to countries other than India increased while that of pashmina, jewelleries and readymade garments declined.
Total imports increased by 16.1 per cent to Rs 43 billion compared to a rise of 5.5 per cent last year. Imports from India rose by 12.2 per cent compared to a rise of 21.8 per cent last year, while imports from third countries went up by 21.4 per cent in contrast to a decline of 10.9 per cent last year.
Trade deficit, according to the central bank, expanded by 26.1 per cent to Rs 19.3 billion due to higher imports. Service receipts increased at a rate higher than that of payments, resulting in a surplus in the service sectors.
Despite the surplus in the service sector, goods, services and income accounts showed a deficit of Rs 17.9 billion. Investment income receipts declined by 6.6 per cent, while payments declined by 14.9 per cent. Current account recorded a surplus of Rs 10.7 billion due to increased inflow of remittances. BoP remained favourable by Rs 936.9 million in the four months period due to sufficient surplus in the current account as well as in the miscellaneous income.
Gross foreign exchange reserves in mid-November 2003 reached Rs 108.4 billion. Convertible reserves increased by 18.8 per cent to Rs 99.4 billion, whereas non-convertible reserves (Indian currently) declined by 59.3 per cent to Rs 9 billion.
Based on the cash flow data, total expenditure increased by 10 per cent to Rs 20.7 billion compared to the marginal growth of 0.5 per cent last year. Of the total expenditure, regular expenditure rose by 7.5 per cent to Rs 16.8 billion compared to an increase of 13.5 per cent last year. The development expenditure surged up by 22 per cent to Rs 2.3 billion in contrast to a sharp decline of 45.2 per cent last year, said the statement.
The national urban consumer price index has increased by 5.8 per cent compared to a rise of 2.2 per cent in the same period last year. The price index, on an annual average basis increased by 5.5 per cent compared to a rise of 2.9 per cent last year. During the first four months of fiscal year 2003-04, broad money grew by 1.6 per cent to Rs. 249.7 billion. Narrow money, however, declined by 3.9 per cent to Rs. 80.5 billion.