Trade deficit touches Rs 67b

KATHMANDU, Jan 2: Even though exports grew by 40 percent, Nepal´s trade deficit widened by over 38 percent and touched Rs 67 billion in the first four months of 2008/09 - thanks to the increase in remittances inflow that continued to propel consumptions, pushing imports upwards. [break]



"Mainly widening of trade deficit with overseas countries by over 63 percent contributed to higher trade imbalance unfavorable to country´s overall trade situation," says a macroeconomic report Nepal Rastra Bank (NRB) released Wednesday.



The central bank´s report portrays an encouraging exports growth totaling to Rs 27 billion. Exports to overseas country went up by about 70 percent, while exports to India grew by 24 percent.



Better exports of ready-made garments, shoes and sandles, GI pipe, toothpaste and cooper wire rod mainly shot up exports to India. Similarly, the rise the exports to other countries was attributed to the increase in the export of pulses, woolen carpets, pashmina, ready-made garments and herbs.



The country´s total imports also swelled by 39 percent and touched Rs 93 billion during the period. Imports from India went up by 22 percent and that from other countries expanded by 65 during the period.



The report attributes import surge to higher remittances inflow, among other things. It says workers´ remittances soared to Rs 63 billion during the period, whereas the same was Rs 38 billion during the same period last year.



In mid-November 2008, the gross foreign exchange reserves stood at Rs 231.34 billion, an increment of 8.8 percent compared to the level as at mid-July 2008.

The report further notes that consumers continued to suffer from higher commodity and services prices, as inflation rose to 14.5 percent in mid-November 2008. It was 6.3 percent in the previous year.



Mainly the prices of food and beverages went up by 17 percent during the period.



Statistics shows, the prices of rice and rice products soared by more than 22 percent, while the prices of pulses and meat rose by 26 percent and 22 percent respectively during the period.



The prices of sugar and sugar related products as well as oil and ghee also increased by about 38 percent and 32 percent respectively. Prices of grains and cereal products also went up by 19.1 percent.

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