KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s fiscal year 2023/24 trade saw a turnover of Rs 1.74 trillion, resulting in a deficit of Rs 1.44 trillion.
Imports totaled Rs 592 billion, with notable items like diesel leading, while exports were Rs 152 billion, declining from the previous year. Electric vehicle imports surged to 11,701 units, contributing significantly to government revenue.
Meanwhile, the Nepal Stock Exchange gained 3.02%, closing at 2,563.43 points, with robust trading activity. Kakarvitta emerged as a key agricultural export hub, exporting crops worth billions, while concerns over rising agricultural imports persisted.
Domestic gold and silver prices remained stable, reflecting steady market conditions.
The Nepal Electricity Authority reinstated electricity supply to six industries amid payment discussions, underscoring ongoing economic management efforts.
Nepal’s FY 2023/24 trade: Rs 1.74 trillion turnover, Rs 1.44 trillion deficit
Nepal’s foreign trade in fiscal year 2023/24 totaled Rs 1,745 billion, resulting in a trade deficit of Rs 1,440 billion, according to the Department of Customs.
Imports amounted to Rs 592 billion, while exports were Rs 152 billion, showing declines from the previous year.
Import figures decreased by 1.16%, and exports by 3.03%, leading to a 1.33% overall decrease in foreign trade and a 0.96% reduction in the trade deficit compared to 2022/23.
India remained Nepal’s top trading partner with a deficit of Rs 893.17 billion, while China followed with a deficit of Rs 296.18 billion.
Nepal recorded its highest trade surplus of Rs 467.05 million with Denmark.
Petroleum products dominated imports, led by diesel at Rs 143.97 billion, while carpets and cardamom were notable export items, totaling Rs 10.57 billion and Rs 7.93 billion, respectively.
Finance Ministry identifies 46 challenges facing Nepal’s economy
Finance Ministry officials briefed Minister Bishnu Prasad Poudel on Nepal’s economic challenges and presented a comprehensive set of measures to tackle them.
They outlined 46 specific challenges spanning 29 sectors of the economy. Key issues highlighted included sluggish economic growth despite available resources, inadequate growth in savings, consumption, and investment, insufficient investment in productive sectors, and a significant trade imbalance.
Concerns included unstable economic growth, a large financing gap, limited savings, and significant internal migration causing population declines in rural areas.
Other challenges highlighted were underperforming productive sectors, declining industrial productivity, an import-heavy revenue system, poor exports, a large trade deficit, modest revenue and expenditure growth, ineffective capital spending, mounting debts, and significant financial pressures for loan repayments.
Nepal imports over 11,000 electric vehicles in fiscal year 2023/24
Nepal saw a significant rise in electric vehicle (EV) imports with 11,701 units imported in the fiscal year 2023/24, nearly three times more than the previous year’s 4,050 units.
The total import value amounted to Rs 29.482 billion, contributing Rs 13.2867 billion in government revenue. The majority of imports, totaling 6,885 units, were in the 51 to 100 kW capacity range.
China emerged as the largest source with 8,065 units imported, followed by 3,377 units from India.
NEPSE ends Tuesday’s trading with 3.02 percent gain
The Nepal Stock Exchange (NEPSE) index saw a notable surge, closing impressively at 2,563.43, marking a substantial increase of 75.33 points or 3.02% on Tuesday compared to the previous day’s close, where it began at 2,493.92.
Throughout the day, the index ranged from a low of 2,469.56 to a high of 2,563.45 before settling at its final value.
Trading activity during the session included 317 scrips exchanged in 171,387 transactions, totaling a volume of 39,790,889 shares and a turnover of Rs. 14.11 billion.
Market capitalization stood at Rs. 4.067 trillion, with a float market capitalization of Rs. 1.396 trillion.
Kakarvitta emerges as eastern Nepal’s agricultural export hub
Kakarvitta, a pivotal transit hub in eastern Nepal’s Jhapa district, played a crucial role in exporting cash crops such as cardamom, tea leaves, ginger, and broom grass, totaling more than Rs 15.33 billion in the fiscal year 2081-82 BS (2023-24).
Agricultural exports to India through Kakarvitta during the same period exceeded Rs 18.95 billion.
According to Chandreshwor Yadav, information officer at Kakarvitta’s Quarantine Office, orthodox tea weighing 11,648 metric tons valued at Rs 6.98 billion was exported through Kakarvitta last fiscal year.
Additionally, Kakarvitta recorded the export of 4,510 metric tons of cardamom valued at over Rs 6.52 billion, and 9,545 metric tons of broom grass worth Rs 1.24 billion.
Nepal faces concerns over rising agricultural imports
Despite Nepal’s historical agricultural roots, there’s growing worry over increased imports, particularly of millet.
Data from Kakadbhitta checkpoint shows a significant uptick: 17,797 tonnes valued at Rs 854 million were imported from India in fiscal year 2080/81, up from 16,035 tonnes costing Rs 513 million the previous year.
Chandra Kishor Thakur, Information Officer at Kakadbhitta’s Plant Quarantine Office, attributes this to dwindling domestic millet cultivation. The trend extends to other products like pumpkins, tomatoes, and green chilies, with substantial imports despite local production capacities.
Stable gold and silver prices hold firm in Nepal’s domestic market
Nepal’s domestic gold market on Tuesday exhibited stability, as reported by the Nepal Gold and Silver Dealers’ Association, with fine gold priced at Rs 146,300 per tola and standard gold at Rs 145,600 per tola, reflecting a marginal increase from the previous day’s rates of Rs 146,200 per tola for fine gold.
Simultaneously, the price of silver stood at Rs 1,790 per tola. This static pricing indicated a pause in recent fluctuations, potentially influenced by global gold price trends and local market conditions.
The consistency in prices suggested steady consumer confidence and investment sentiment in precious metals amidst economic uncertainties.
NEA to restore electricity supply to six industries amid payment discussions
The Nepal Electricity Authority (NEA) decided to reinstate electricity supply to six industries after discussions led by Minister for Energy, Water Resources and Irrigation, Dipak Khadka, and NEA Managing Director Kulman Ghising on Tuesday.
The decision follows efforts to recover outstanding payments from these industries, with a three-month grace period granted for settlement.
Despite dissenting views from some board members, prompted by directives from Prime Minister KP Sharma Oli to reconnect power lines, the majority consensus in Tuesday’s meeting led to the restoration of electricity.
Forex: US dollar, Qatari riyal witness rise
Today’s forex rates set by the Nepal Rastra Bank show increases for the US dollar and Qatari riyal, with the dollar buying at 133.61 NPR and selling at 134.21 NPR.
Meanwhile, the euro and British pound have decreased in value against the Nepali rupee.
Specifically, the euro buys at 145.19 NPR and sells at 145.84 NPR, while the pound buys at 172.48 NPR and sells at 173.25 NPR.
The Qatari riyal’s rates are set at 36.64 NPR for buying and 36.80 NPR for selling, according to the central bank.
(Compiled and prepared by Srija Khanal)
Economic Digest is a daily morning economic digest, basically relatable summations of the most important business news, and happenings from Nepal into easy-to-understand summaries.
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