Trade deficit crosses Rs 117.41b
Kathmandu, August 9:
Due to a sharp rise in imports vis-à-vis exports, Nepal’s trade deficit continues to widen, as it crossed Rs 117.41 billion during the first 11 months of the fiscal year 2006-07.
However, the pace of trade deficit slowed down from 25.6 per cent during the same period in 2005-06 to 16.6 per cent. The total trade deficit had crossed Rs 100.67 billion
According to the current macroeconomic report released by Nepal Rastra Bank (NRB), total exports rose by a mere 0.8 per cent during the period, while imports registered a growth of 11 per cent.
Total exports in the corresponding period of the previous fiscal had risen by 2.9
per cent while imports rose by 16.6 per cent.
Nepal exported various goods worth over Rs 55.45
billion during the period, whereas total imports stood at Rs 172.86 billion. The central bank has cited a number of factors including deteriorating security condition, frequent bandhs, lack of investment-friendly environment and power shortages for a continuous fall in exports.
While, exports to India rose by 2.1 per cent in the review period compared to a higher growth of 5.5 per cent in the same period of 2005-06, exports to other countries declined by two per cent in comparison to a decline of 2.1 per cent in the preceding year.
The rise in exports of thread, textiles, zinc sheet, M S pipe and juice was responsible for the slight increase in exports to India. On the other hand, a decline in exports to other countries emanated from the fall in the export of readymade garments, pashmina, woolen carpets, handicrafts and Nepali handmade paper.
The rise in total imports during the review period was attributed to a rise in imports of vehicles and spare parts, petroleum products, cold-rolled sheet in coil and electrical equipment, among others, from India as well as a rise in imports of crude palm oil, computer parts, gold, medicine and telecommunication equipment and parts, among others, from other countries.
During the period, imports from India increased by 10.8 per cent compared to a higher growth of 20.8 per cent last year. Likewise, imports from other countries rose by 11.3 0 per cent in comparison to a growth of 10.4 per cent in the preceding year.
The overall balance of payments (BoP) recorded a surplus of Rs 6.24 billion in the first eleven months of 2006-07. Of this surplus, the current account surplus was Rs 3.35 billion and the remaining Rs 2.89 billion was ascribed to capital and financial accounts.
In the corresponding period of 2005-06, the current account and BoP had registered a surplus of Rs 12.98 billion and Rs 21.86 billion, respectively.
The inflow of remittances increased by 3.9 per cent in the review period as compared to substantially higher growth of 48.4 per cent in the corresponding period last year. In dollar terms, remittances rose by 5.7 per cent.