Trade deficit rose by 28.9 percent mainly due to surge in imports of petroleum products which is around one and half times higher than total export volume of Rs 44.2 billion during the review period.[break]
Experts said surging import bills amid rising consumption in the country and slowing supply capacity were the reasons behind ballooning trade deficit despite total trade volume increasing by 21.8 percent to Rs 384.36 billion. Contribution of exports and imports in the total trade stood at 11.5 percent and 88.5 percent, respectively.
Trade and Export Promotion Center (TEPC), which compiles official trade data, stated that country´s total exports increased by a paltry 3.7 percent to Rs 44.2 billion. Similarly, total imports increased by 24.7 percent to Rs 340.16 billion.
Imports of petroleum products, which is the country´s largest imports, increased by over 22 percent to Rs 60.78 billion during the review period compared to figures of the same period last year.
Iron and steel products were Nepal´s second largest import during the review period. Nepal imported iron and steel products worth Rs 34.12 billion, a rise of 21.7 percent compared to figures of the same period last year. Similarly, transport vehicles and their parts become the country´s third largest imports during the review period with their imports going up by 39.9 percent to touch Rs 19.69 billion. Imports of machineries and their parts also shot up by 17.93 percent to Rs 26.9 percent and gold imports also went up by 9.7 percent to Rs 15.13 billion.
Though the government increased import duty on gold by Rs 700 per 10 gram to Rs 3,000 effective from January 25, imports of the precious metal continued to soar.
During the review period, iron and steels products, woolen carpet, readymade garments (RMGs), lentil, cardamom, yarn and textile maintained their position as the major exports items despite decline in exports of some of them.
Iron and steel products maintained its position as the country´s largest export product during the review period. Nepal exported iron and steel products worth Rs 6.93 billion, up by 6.8 percent. Similarly, yarn became the country´s second largest export despite recording drop in export value by 6.3 percent. Nepal exported yarn worth Rs 3.34 during the review period. Export of textiles, the third largest export, increased by 8.4 percent to Rs 3.03 billion.
Woolen carpet became the country´s fourth largest exports with export volume touching Rs 2.99 billion, which is 18. 3 percent down, compared to figures of the first seven months of 2011/12. Exports of RMG, which has been losing overseas markets, dropped by a whopping 24.5 percent to Rs 2.03 billion during the review period. However, exports of lentil and cardamom impressively went up by 61.1 percent and 21.3 percent, respectively to reach Rs 2.23 billion and Rs 2.11 billion.
Shrinking international markets amid economic gloom in major importing countries and weakening supply capacity due to shortage of workers, political instability and power shortage have been blamed for country´s week export performance.
During the period, Nepal´s exports to India -- the largest trade partner -- rose by a meager 1.8 percent to Rs 29 billion. However, imports from the Asia´s third largest economy increased by a whopping 26.9 percent to Rs 222.67 billion.
Top Five Imports
- Petroleum products Rs 60.78 billion
- Iron and steel Rs 34.12 billion
- Transport vehicles/parts Rs 19.69 billion
- Machinery/parts Rs17.93 billion
- Gold Rs 15.13 billion
Top Five Exports
- Iron and steel Rs 6.93 billion
- Yarn Rs 3.34 billion
- Textile Rs 3.03 billion
- Woolen carpet Rs 2.99 billion
- Lentil Rs 2.23 billion
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