The country had reported a BoP surplus of Rs 81.09 billion in the same period of the last fiscal year when trade deficit was lower and remittance growth rate was higher than in the current financial year. [break]However, the BoP surplus recorded in the eight-month period to March 13 was higher than Rs 1.59 billion recorded in the first seven months of the current fiscal year, when trade deficit continued widening while remittance growth rate had shrunk to 19.6 percent.
Nepalis working abroad sent home Rs 266.09 billion in the first eight months, up 22.2 percent from that of the same period last fiscal year. The remittance growth rate had stood at 34.7 percent in the same period last fiscal year.
As remittance growth shrunk and trade deficit widened, the current account surplus -- difference between exports and imports of goods and services and transfers from the country and aboard -- narrowed to Rs 9.50 billion in the review period from a surplus of Rs 37.51 billion recorded in the same period last fiscal year.
“The decline in surplus in the current account was largely due to a substantial rise in the imports of merchandise and services as well as the slow growth of workers´ remittances in the review period,” says the latest macroeconomic report made public by Nepal Rastra Bank on Tuesday.
The country´s total trade deficit widened by 25.5 percent to Rs 309.55 billion in the eight-month period compared to an increase of 17.1 percent recorded in the same period last year, as the country´s imports exceeded exports.
“Due to high growth of imports, the ratio of export to import declined to 14.1 percent in the review period from 16.4 percent a year ago,” the NRB report says.
Merchandise imports surged by 22.1 percent to Rs 360.56 billion in the eight-month period. Imports from India went up by 24.2 percent during the review period compared to an increase of 12 percent in the same period last year. Imports from other countries rose by 18.2 percent compared to an increase of 26.3 percent in the same period last year.
“Imports from India increased primarily owing to an increase in the imports of petroleum products, vehicles and spare parts, cement, rice and other machinery and parts, among others,” the report says. “Likewise, imports from other countries increased mainly on account of an increase in the imports of readymade garments, pipe and pipe fittings, silver, telecommunication equipment parts, and MS wire rod, among others.”
Compared to imports, merchandise exports went up by mere five percent to Rs 51.01 billion in the eight-month period. Exports had increased by 14.1 percent to Rs 48.56 billion in the same period last year.
Of the total exports, exports to India increased by two percent in the review period as against growth of 14.5 percent recorded in the same period last year. Exports to other countries went up by 11.2 percent in the eight-month period, as against growth of 13.5 percent recorded in the same period last year.
Nepal´s major exports to India comprised GI pipe, jute sackings, wire, ginger and textiles, exports to other countries included pulses, tanned skin and readymade leather goods, among others.
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