But the figure is less than half of what was recorded in the same period last year, Nepal Ratsra Bank (NRB) said on Friday, adding that the situation improved because of export rebound, higher growth in workers´ remittance and compressed growth in import.[break]
“The current account deficit also shrank to Rs 2.17 billion during the period, compared to Rs 12.33 billion of the same period last year,” states the latest macro-economic report that the central bank released on the day.
According to the report, Nepal received Rs 8.64 billion in pension, recording a growth of 22.8 percent. Workers´ remittance flow too recorded strong growth of 16 percent and touched Rs 60.01 billion as at mid-October 2010.
Contrary to previous year´s decline, exports grew by 5.9 percent and touched Rs 16.87 billion during the first quarter. Exports to India, which increased by 11.8 percent in the first quarters, pushed the total exports upward. However, Nepal still continues to lose third country markets amid eroding competitiveness and too much dependence on crisis-slowed markets. Exports to other countries declined by 2.4 percent during the period.
Imports, on the other hand, grew at a squeezed rate of 3.6 percent and touched Rs 92.98 billion in the three months of 2010/11. Of the total import, imports from India grew by 31.9 percent, while imports from other countries declined by 29.1 percent.
As a result, total trade deficit during the three months of 2010/11 expanded by lower rate of 3.2 percent to Rs 76.11 billion. Trade deficit had risen by 50.7 percent in the same period last year.
Country´s total foreign exchange reserves declined by 4.4 percent to Rs 257.06 billion in mid-October 2010 from Rs 268.91 billion of mid-July 2010. In dollar terms, however, the reserves increased marginally by 0.6 percent to $3.63 billion in mid-October 2010, states the report.
The report, however, paints dismal picture in terms of inflation. For instance, the prices of commodities in mid-October grew by 8.9 percent this year, whereas it was 8.5 percent in the same month last year.
The prices of foods and beverages continued to jump by more than 13 percent, while the prices of services increased by 5.5 percent. Of the food items, the prices of spices increased by a whopping 41.1 percent, while the prices of sugar and sweets also increased by 28.6 percent.
The price of cereals and their products increased by 17 percent, milk products and egg jumped by 14.9 percent and menu prices in restaurant and hotels went up by 14.8 percent.
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