KATHMANDU: The year-on-year consumer price inflation in the country stood at 7.14 percent in the eight months of 2021/22 compared to 3.03 percent a year ago, according to Nepal Rastra Bank (NRB).

Food and beverage inflation stood at 7.51 percent whereas non-food and service inflation stood at 6.84 percent in the review month, it said.

Releasing a report on the Current Macroeconomic and Financial Situation of Nepal, NRB said under the food and beverage category, the prices of ghee & oil, vegetable, milk products and eggs and pulses & legumes sub-categories rose by 26.34 percent, 13.96 percent, 11.30 and 10.30 percent respectively on year-on-year (y-o-y) basis.

Likewise, under the non-food and services category, the prices of transportation, miscellaneous goods and services & education sub-categories rose by 16.27 percent, 9.01 percent and 8.79 percent respectively on y-o-y basis.

The y-o-y consumer price inflation stood at 7.14 percent in the eighth month of 2021/22 compared to 3.03 percent a year ago.

Food and beverage inflation stood at 7.51 percent whereas non-food and service inflation stood at 6.84 percent in the review month, according to the report.

Under the food and beverage category, the prices of ghee & oil, vegetable, milk products and eggs and pulses & legumes sub-categories rose by 26.34 percent, 13.96 percent, 11.30 and 10.30 percent respectively on y-o-y basis.

Likewise, under the non-food and services category, the prices of transportation, miscellaneous goods and services & education sub-categories rose by 16.27 percent, 9.01 percent and 8.79 percent respectively on y-o-y basis.

The Kathmandu Valley, Terai, Hill and Mountain witnessed inflation of 6.31 percent, 7.36 percent, 7.69 percent and 7.56 percent respectively.

Likewise, the inflation in these regions was 2.50 percent, 3.25 percent, 3.40 percent and 1.31 percent respectively a year ago.

The wholesale price inflation stood at 13.13 percent in the review month compared to 6.30 percent a year ago.

Similarly, the y-o-y wholesale price of consumption goods, intermediate goods and capital goods increased 15.04 percent, 12.99 percent and 7.61 percent respectively, and the wholesale price of construction materials increased 24.24 percent in the review month.

During the eight months of 2021/22, merchandise exports increased 82.9 percent to Rs.147.75 billion compared to an increase of 7.8 percent in the same period of the previous year.

Destination-wise, exports to India and other countries increased 104.2 percent and 29.1 respectively whereas exports to China decreased 11.0 percent, it said.

Likewise, exports of palm oil, soybean oil, oil cakes, polyster yarn and thread, woolen carpets among others, increased whereas exports of cardamom, tea, herbs, wire, copper wire rod, among others, decreased in the review period.

During the eight months of 2021/22, merchandise imports increased 38.6 percent to Rs.1308.73 billion compared to an increase of 2.1 percent a year ago.

Destination-wise, imports from India, China and other countries increased 28.1 percent, 36.7 percent, and 75.4 percent respectively.

Imports of petroleum products, medicine, crude palm oil, crude soybean oil, gold, among others, increased whereas imports of M.S. billet, cement, chemical fertilizer, pulses, molasses sugar, among others, decreased in the review period.

Based on customs points, exports from Kanchanpur, Mechi, and Nepalgunj Customs Office decreased whereas exports from all the other major customs points increased in the review period.

On the import side, imports from all the major customs points increased in the review period.

The total trade deficit increased 34.5 percent to Rs.1160.99 billion during the eight months of 2021/22.

Such a deficit had increased 1.6 percent in the corresponding period of the previous year.

Meanwhile, during the eight months of 2021/22, merchandise imports from India by paying convertible foreign currency amounted Rs.147.03 billion.

According to NRB, such amount was Rs.121.36 billion in the same period of the previous year.

Likewise, as per the Broad Economic Categories (BEC), the intermediate and final consumption goods accounted for 47.3 percent and 52.7 percent of the total exports respectively, whereas the ratio of capital goods in total exports remained negligible at 0.02 percent in the review period.

In the same period of the previous year, the ratio of intermediate, capital and final consumption goods remained 32.3 percent, 0.5 percent and 67.2 percent of total exports respectively.

On the imports side, the share of intermediate goods remained 53.5 percent, capital goods 10.7 percent and final consumption goods remained 35.8 percent in the review period.

Such ratios were 53.5 percent, 11.8 percent and 34.7 percent respectively in the same period of the previous year, according to NRB report.

The y-o-y unit value export price index, based on customs data, increased 11.3 percent and the import price index increased 13.8 percent in the eighth month of 2021/22.

The terms of trade (ToT) index decreased 2.2 percent in the review month compared to a decrease of 1.2 percent a year ago.

Net services income remained at a deficit of Rs.67.02 billion in the review period compared to a deficit of Rs.43.36 billion in the same period of the previous year.

Under the service account, travel income increased 224.4 percent to Rs.14.49 billion in the review period which was Rs.4.47 billion in the same period of the previous year.

Likewise, under the service account, travel payments increased 106.2 percent to Rs.46.85 billion, including Rs.30.38 billion for education.

Such payments were Rs.22.71 billion and Rs.18.41 billion respectively in the same period of the previous year.

Remittance inflows decreased 1.7 percent to Rs.631.19 billion in the review period against an increase of 8.7 percent in the same period of the previous year.

In the US Dollar terms, remittance inflows decreased 3.0 percent to 5.28 billion in the review period against an increase of 5.0 percent in the same period of the previous year, it said.

Similarly, the number of Nepali workers taking approval for foreign employment increased significantly to 227,900 in the review period.

It had decreased 82.9 percent in the same period of the previous year. The number of Nepali workers (Renew entry) taking approval for foreign employment increased 240.9 percent to 178,262 in the review period.

The number had decreased 70.2 percent in the same period of the previous year.

Likewise, according to the report, net transfer decreased 2.0 percent to Rs.704.33 billion in the review period.

Such a transfer had increased 7.2 percent in the same period of the previous year.

The current account remained at a deficit of Rs.462.93 billion in the review period compared to a deficit of Rs.151.42 billion in the same period of the previous year.

In the US Dollar terms, the current account registered a deficit of 3.88 billion in the review period compared to deficit of 1.29 billion in the same period last year.

In the review period, capital transfer decreased 41.2 percent to Rs.7 billion and net foreign direct investment (FDI) increased 60.0 percent to Rs.16.30 billion.

In the same period of the previous year, capital transfer and net FDI amounted to Rs.11.91 billion and Rs.10.18 billion respectively.

Balance of Payments (BOP) remained at a deficit of Rs.258.64 billion in the review period against a surplus of Rs.68.01 billion in the same period of the previous year.

In the US Dollar terms, the BOP remained at a deficit of 2.17 billion in the review period against a surplus of 565.8 million in the same period of the previous year.

Gross foreign exchange reserves decreased 16.3 percent to Rs.1171 billion in mid-March 2022 from Rs.1399.03 billion in mid-July 2021.

In the US dollar terms, the gross foreign exchange reserves decreased 18.5 percent to 9.58 billion in mid-March 2022 from 11.75 billion in mid-July 2021. 25.

Of the total foreign exchange reserves, reserves held by NRB decreased 18.2 percent to Rs.1018.05 billion in mid-March 2022 from Rs.1244.63 billion in mid-July 2021.

Reserves held by banks and financial institutions (except NRB) decreased 0.9 percent to Rs.152.95 billion in mid-March 2022 from Rs.154.39 billion in mid-July 2021.

The share of Indian currency in total reserves stood at 24.2 percent in mid-March 2022.

Meanwhile, based on the imports of eight months of 2021/22, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 7.4 months, and merchandise and services imports of 6.7 months.

The ratio of reserves-to-GDP (previous fiscal year), reserves-to-imports and reserves-to-M2 stood at 27.4 percent, 55.6 percent and 22.0 percent respectively in mid-March 2022.

Such ratios were 32.8 percent, 84.7 percent and 27.1 percent respectively in mid-July 2021.

Likewise, the price of oil (Crude Oil Brent) in the international market increased 60.3 percent to US dollar 110.39 per barrel in mid-March 2022 from US dollar 68.87 per barrel a year ago.

The price of gold increased 14.6 percent to US dollar 1954.05 per ounce in mid-March 2022 from US dollar 1704.80 per ounce a year ago.

Nepalese currency vis-à-vis the US dollar depreciated 2.63 percent in mid-March 2022 from mid-July 2021.

It had appreciated 3.62 percent in the same period of the previous year. The buying exchange rate per US dollar stood at Rs.122.25 in mid-March 2022 compared to Rs.119.04 in mid-July 2021.