Nepal | October 21, 2019

Trade gap widening each passing year

Himalayan News Service

Kathmandu, May 10

The country has imported goods worth Rs 13.1 against export of one rupee in the first nine months of this fiscal (mid-July to mid-April). In the corresponding period of last fiscal, the country imported goods worth Rs 10.4 against export of one rupee, according to Trade and Export Promotion Centre (TEPC).

The trade gap has been widening every passing year due to the rising imports and sluggish exports. Imports have surged substantially in this fiscal as the import of construction materials has increased dramatically for the post-earthquake reconstruction work.

TEPC data show that imports have doubled within the last six years. The country’s total import in the first nine months of fiscal 2011-12 was Rs 362.52 billion, which has doubled to Rs 726.02 billion in the corresponding period of this fiscal. The country’s import was 6.5 times higher than export in the first nine months of fiscal 2011-12, which has risen to 13.1 times of export in the corresponding period of this fiscal.

The country’s export figure has plummeted to Rs 55.26 billion in the first nine months of this fiscal as compared to the corresponding period of 2011-12, when it was worth Rs 55.91 billion. The country’s total trade deficit in the first nine months of this fiscal stands at Rs 670.8 billion as the country imported goods worth Rs 726.02 billion against exports of Rs 55.26 billion.

Import-export ratioCommerce Secretary Naindra Prasad Upadhyay said that trade deficit itself is not always harmful for the economy if the country imports capital goods to enhance production, which has multiple benefits like employment generation and rise in exports.

“But we need to be careful about the rising import of consumable goods, which do not have a significant impact on the economy except for revenue generation,” he said. “The country needs to develop a strong production base so that we can be self-reliant in various products and also to reap the benefit of exporting goods that have competitive and comparative advantage in the world market.”

Upadhyay said that the export-to-import ratio will stand at 1:20 by 2020, if the country is not able to enhance the production base and raise exports because it is difficult to curb imports without boosting productive capacity.


A version of this article appears in print on May 11, 2017 of The Himalayan Times.


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