Kathmandu, September 22

The country witnessed trade deficit of Rs 70.60 billion in the first month of the current fiscal year (mid-July to mid-August), an increase of 10.1 per cent against the corresponding period of last fiscal year. The growth rate of trade deficit, however, has contracted when compared to growth rate of 13.6 per cent in the first month of last fiscal.

Merchandise imports increased by 9.3 per cent to Rs 77.28 billion in the review period compared to a growth of 13 per cent in the same period of the previous year. Meanwhile, exports decreased by 3.9 per cent to Rs 6.68 billion against growth of 7.7 per cent in the same period of the previous fiscal.

In the review period, imports from India rose by nine per cent whereas imports from China and other countries went up by 14.2 per cent and 7.1 per cent, respectively. In the review month, import of petroleum products, gold, cement, hot rolled sheet in coil, aircraft spare parts, among others increased, whereas import of edible oil, machinery and parts, electrical goods and equipment, cold rolled sheet in coil and agricultural equipment, among others, decreased.

Merchandise export to India dropped in the first month of the current fiscal year by 10.1 per cent to stand at Rs 3.44 billion against Rs 3.82 billion in the corresponding period of last fiscal year.

Drop in export of commodities like raw jute, soap and mustard and linseed contributed to the decline in exports to India in this period. Export of aforementioned commodities declined by 100 per cent, according to Current Macro Economic and Financial Situation of Nepal published by Nepal Rastra Bank — the central bank of the country — today. However, export of hessian and particleboards increased by 305 per cent and 298 per cent, respectively in review period.

Exports to China and other countries increased 11.3 per cent and 3.2 per cent, respectively in the review period. Commodity-wise, export of zinc sheet, thread, readymade garments and oil cake, among others, increased whereas the export of woollen carpets, polyester yarn, toothpaste and cardamom, among others, decreased in review month.

Workers’ remittances increased seven per cent to Rs 55.55 billion in the review period in contrast to a decline by 2.5 per cent in the same period of the previous fiscal. However, outflow of migrant workers fell by 11.8 per cent in the review period following a decline of 6.9 per cent in same period of last fiscal.

Consequently, net transfer receipt went up by 4.9 per cent to Rs 62.70 billion in the review period. Such receipt had fallen by 2.5 per cent in the same period of the previous year. The current account registered a deficit of Rs 5.43 billion in the review period because of the widening trade deficit. The current account deficit amounted to Rs 2.32 billion in the same period of the previous year. Similarly, the overall balance of payments (BoP) resulted in a deficit of Rs 3.29 billion in the review period compared to a deficit of Rs 2.11 billion in the same period of the previous fiscal year.

In the review period, Nepal received capital transfer amounting to Rs 674.7 million and foreign direct investment (FDI) inflows of Rs 4.61 billion. In the same period of the previous year, capital transfer and FDI inflows were Rs 606 million and Rs 1.23 billion, respectively.