KATHMANDU: The economic landscape of the nation is witnessing positive strides, with various indicators showcasing robust growth in the initial five months of the ongoing fiscal year.
The recently released macroeconomic and financial overview by the central bank provides insight into the favorable economic conditions, featuring reduced inflation rates and substantial increases in remittance inflows and foreign reserves.
According to the Nepal Rastra Bank (NRB), year-on-year consumer price inflation has moderated to 4.95 percent in mid-December 2023, marking a significant decrease from 7.38 percent a year ago.
Notably, merchandise imports have decreased by 3.4 percent to Rs 642.21 billion during the review period, with a noteworthy shift in import patterns.
Imports from India and other countries have decreased by 1.3 percent and 28.4 percent, respectively, while imports from China have surged by 32.8 percent.
The Nepal Rastra Bank’s report also highlights a commendable 14.8 percent growth in gross foreign exchange reserves, reaching Rs 1767.04 billion in mid-December 2023 from Rs 1539.36 billion in mid-July 2023.
The report reveals a nuanced picture of trade dynamics, with increases in imports of items like readymade garments, M.S. wire rod, bars, and coils, electrical equipment, textiles, and aircraft spare parts. Conversely, imports of gold, crude soybean oil, crude palm oil, petroleum products, rice/paddy, among others, have seen a decline.
The overall trade deficit has also shrunk by 3.1 percent to Rs 579 billion during the review period, compared to an 18.8 percent decrease in the corresponding period of the previous year.
The remittance sector has emerged as a significant contributor to the positive economic trajectory, recording a robust growth of 27.6 percent to Rs 613.25 billion in the review period.
This surge is notably higher than the 23.0 percent increase in the same period of the previous year.
Furthermore, the balance of payments has maintained a surplus of Rs 210.59 billion in the first five months of the current fiscal year, showcasing a substantial increase from the surplus of Rs 45.87 billion in the same period of the previous year.
The Nepal Rastra Bank’s report also highlights a commendable 14.8 percent growth in gross foreign exchange reserves, reaching Rs 1767.04 billion in mid-December 2023 from Rs 1539.36 billion in mid-July 2023.
Notably, the reserves held by the NRB have increased by 15.6 percent, reaching Rs 1556.25 billion in mid-December 2023 from Rs 1345.78 billion in mid-July 2023.
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