KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic outlook for the first four months of fiscal year 2024/25 presents a mixed but somewhat positive trend.
The inflation rate remains stable at 5.6%, reflecting moderate price stability in the country.
Additionally, the foreign exchange reserves are robust, standing at USD 16.7 billion, which is sufficient to cover imports for 15.1 months and offers a cushion against external economic shocks.
On the trade front, Nepal has seen a recovery in merchandise exports, which rose by 4.2% compared to the previous year.
This growth was largely driven by a significant increase in exports to India, though exports to other countries, including China, have declined.
Key export sectors like soybean oil, tea, and polyester yarn show resilience, despite challenges in areas like palm oil and ready-made garments.
These developments highlight an uneven economic recovery, with some sectors performing better than others.
The broader trade balance remains vulnerable to shifts in external demand.
Nepal’s inflation holds steady at 5.6% year-on-year
Nepal Rastra Bank’s macroeconomic and financial overview for the first four months of fiscal year 2024/25 highlights a mixed yet somewhat positive economic trend.
The inflation rate remains steady at 5.60% year-on-year, indicating moderate price stability.
The country’s foreign exchange reserves, amounting to USD 16.70 billion, are sufficient to cover imports for 15.1 months, providing a strong buffer against external shocks.
On the trade front, merchandise exports saw a 4.2% increase compared to the previous year, a notable recovery from the 7.7% decline observed last year.
However, the growth in exports is primarily driven by an 8.4% rise in exports to India, while exports to China and other countries declined.
The performance of key export items such as soybean oil, tea, and polyester yarn suggests some resilience in certain sectors, though challenges remain in products like palm oil and ready-made garments.
This data paints a picture of a mixed recovery, with some sectors performing better than others, while the overall trade balance remains sensitive to external demand shifts.
NEPSE ends the week with a 1.92% drop and a turnover of Rs 28.39 billion
The NEPSE Index finished at 2,682.29, down by 52.64 points (1.92%). In comparison, it closed at 2,734.93 last week, marking a decline of 0.48% from the previous week.
This week, the index reached a high of 2,735.67 and a low of 2,660.36, experiencing a volatility of 75.31 points, compared to the 66.2 points seen the previous week.
The largest intraday increase occurred on Wednesday, with a gain of 45.89 points and a turnover of Rs 5.05 billion. The total turnover for the week amounted to Rs 28.39 biilion.
Gold price drops by Rs 1,200 per tola today
After a rise of Rs 4,500 in just three days, the price of gold decreased by Rs 1,200 per tola on Friday.
The current price of gold stood at Rs 153,000 per tola, according to the Nepal Gold and Silver Dealers Federation. Silver prices also decreased today.
Silver prices have decreased by Rs 65, now at Rs 1,860 per tola, compared to Rs 1,925 per tola yesterday.
Construction of New Butwal-Bardaghat Transmission Line completes
Construction of new Butwal-Bardaghat 220 kV Double Circuit Transmission Line has been completed.
The construction of this transmission line will contribute to strengthen and make country’s power transmission system trustworthy, facilitating the supply of electricity produced from hydropower projects to be constructed in western areas and expanding bilateral and regional power trade between Nepal and India.
(Prepared by Srija Khanal)
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