Nepal’s trade deficit continues to balloon with the figure reaching Rs 396.96 billion in the first eight months of the fiscal year. The deficit is Rs 87.4 billion higher than during the same period in the previous year.
Nepal Rastra Bank (NRB) said in its report on the country’s macro economy released on Sunday that a massive surge in imports resulted in the bloated trade deficit. According to the central bank, merchandise exports grew 19.4 percent to Rs 60.90 billion while imports surged 27 percent to Rs. 457.85 billion.
Imports from both India and third countries have surged contributing to the massive trade deficit. With regard to exports, shipments to India have risen while other countries witnessed a modest growth, according to the report.
The imbalance between exports and imports is so wide that the country’s export earnings are adequate to pay only 13.3 percent of its import bills. The volume of exports compared to imports was just 16.4 percent during the same period two years ago. It declined continuously in the following two years.
Despite the huge trade deficit, the country’s ability to import goods and services is quite good due to a massive inflow of remittance that has resulted in the foreign exchange reserve piling up.
The foreign exchange reserve amounted to Rs 653.42 billion as of mid-March recording a rise of 22.5 percent compared to the figure of mid-July 2013. The reserve is adequate to sustain imports of goods and services for 10.1 months.
The inflow of remittance surged 34.1 percent to Rs 356.72 billion during the review period. Similarly, service income such as income from tourism and foreign aid surged during the eight months.
As a result, the balance of payments, the difference between the money coming into the country and the money going out, recorded a surplus of Rs 102.81 billion. In fiscal 2011-12, the balance of payments had reached an all-time high of Rs 127 billion.
Remaining
Nepal Rastra Bank (NRB) said in its report on the country’s macro economy released on Sunday that a massive surge in imports resulted in the bloated trade deficit. According to the central bank, merchandise exports grew 19.4 percent to Rs 60.90 billion while imports surged 27 percent to Rs. 457.85 billion.
Imports from both India and third countries have surged contributing to the massive trade deficit. With regard to exports, shipments to India have risen while other countries witnessed a modest growth, according to the report.
The imbalance between exports and imports is so wide that the country’s export earnings are adequate to pay only 13.3 percent of its import bills. The volume of exports compared to imports was just 16.4 percent during the same period two years ago. It declined continuously in the following two years.
Despite the huge trade deficit, the country’s ability to import goods and services is quite good due to a massive inflow of remittance that has resulted in the foreign exchange reserve piling up.
The foreign exchange reserve amounted to Rs 653.42 billion as of mid-March recording a rise of 22.5 percent compared to the figure of mid-July 2013. The reserve is adequate to sustain imports of goods and services for 10.1 months.
The inflow of remittance surged 34.1 percent to Rs 356.72 billion during the review period. Similarly, service income such as income from tourism and foreign aid surged during the eight months.
As a result, the balance of payments, the difference between the money coming into the country and the money going out, recorded a surplus of Rs 102.81 billion. In fiscal 2011-12, the balance of payments had reached an all-time high of Rs 127 billion.
Remaining
0 comments:
Post a Comment