Trade deficit expands to Rs 1,577.39 billion « Khabarhub
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Trade deficit expands to Rs 1,577.39 billion


11 July 2022  

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KATHMANDU: The Current Macroeconomic and Financial Situation of Nepal released by the Nepal Rastra Bank (NRB) on Monday paints a bleak picture of the country’s economy.

While year-on-year inflation stood at 8.56 percent, imports increased by 27.5 percent ballooning the trade deficit to Rs 1,577.39 billion in the 11 months of the fiscal year 2021/22.

Inflation

The inflation stood at 4.19 percent in the same period of last year.

According to the central bank, food and beverage inflation stood at 7.43 percent whereas non-food and service inflation stood at 9.44 percent in the review month.

The average monthly y-o-y inflation for 11 months was 6.09%, the central bank noted.

Under the food and beverage category, the prices of ghee & oil, milk products & eggs, tobacco products, alcoholic drinks, and pulses & legumes went up by 22.60 percent, 11.22 percent, 9.70 percent, 9.68 percent, and 9.13 percent, respectively, on year on year basis.

Petroleum products, medicine, crude palm oil, gold, and other machinery and parts, among others, were the country’s major imports in the first 11 months of 2021/22.

Likewise, under the non-food and services category, the prices of transportation, education, furnishing & household equipment, recreation & culture and housing & utilities sub-categories increased by 25.79 percent, 11.64 percent, 8.30 percent, 8.21 percent and 7.84 percent, respectively.

Inflation was the highest in the hilly region (9.28%), followed by mountain (8.92%), Kathmandu Valley (8.32%) and Tarai (7.84%).

Foreign Trade

In the first eleven months of 2021/22, merchandise exports increased by 53.3 percent to Rs 185.84 billion compared to a rise of 37.8 percent in the same period of the previous.

Exports to India increased by 61.8 percent, while exports to China fell by 21.4 percent.

According to the Central bank, exports of palm oil, soybean oil, polyester yarn and thread, woolen carpets, and zinc sheet, among others, increased, in the review period whereas exports of cardamom, tea, medicine (ayurvedic), toothpaste, wire, among others, decreased.

Imports increased by 27.5 percent to a whopping Rs 1,763.22 billion, compared to a growth of 25.7 percent in the same period a year ago.

Imports from India, China, and other countries were up by 24.2 percent, 16 percent and 46.1 percent, respectively.

Petroleum products, medicine, crude palm oil, gold, and other machinery and parts, among others, were the country’s major imports during the review period.

Remittances

Remittances increased by 3.8 percent to Rs 904.18 billion in the review period, compared to a rise of 12.6 percent in the same period of the previous year. In US dollar terms, remittance was up by 1.5 percent to $7.51 billion.

Net transfer increased at a slower rate of 3.6 percent to Rs 1,006.07 billion in the first eleven months of 2021/22, compared to an 11.5 percent growth in the same period of the previous fiscal year.

Current Account and BoP

The current account remained at a deficit of Rs 595.73 billion in the review period compared to a deficit of Rs 298.11 billion in the same period of the previous year.

In the US Dollar terms, the current account registered a deficit of 4.96 billion in the review period compared to a deficit of 2.54 billion in the same period last year.

In the review period, the capital transfer fell by 32.9 percent to Rs 9.49 billion, while net foreign direct investment (FDI) was up by 7.1 percent to Rs 17.35 billion.

Balance of Payment (BoP) remained at a deficit of Rs 269.81 billion in the review period against a deficit of Rs 15.15 billion in the first 11 months of the previous fiscal year.

Publish Date : 11 July 2022 20:30 PM

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