Nepal Rastra Bank says commodity prices eased slightly during the seventh month of 2008/09, but consumers still could not heave sigh of relief, as inflation still remained well above 13.7 percent in mid-February 2009. [break]
The prices of food and beverages, non-food items and services show no sign of falling, according to the latest macroeconomic report released by NRB Monday. “Food and beverages prices grew by 18.1 percent, while the prices non-food items and services also rose by 9.1 percent,” in mid-February, 2009,” says the report.
Among food items, price of sugar and sugar-related products soared by 46.7 percent during the period. The prices of pulses as well as meat, fish and eggs also increased by 26.5 percent and 22.9 percent respectively. The price of grains and cereal increased by 14.7 percent, and the prices of oil and ghee rose by 19.8 percent.
The NRB report says Nepal received over Rs 109 billion in remittances from workers abroad during the first seven months of the current fiscal year. However, the rate of growth, recorded at 58.6 percent for the period, was slightly less compared to rate recorded till last month.
Increased remittance inflow continued to buoy consumption, resulting in a sharp rise in imports.
According to the NRB report, total imports rose 25.5 percent and touched Rs 155.77 billion over the first seven months of the fiscal year. While imports from India increased by 12.5 percent, imports from other countries surged by 47.9 percent compared to the same period last year.
Increase in the import of petroleum products, vehicles and spare parts, cold rolled sheet in coil and medicine, among others, from India and gold, electrical goods, MS billet and other machinery and parts from other countries mainly pushed imports upwards.
Despite protracted load-shedding and deteriorating industrial environment, exports also rose by 19.5 percent to touch Rs 40 billion mark in the first seven months of 2008/09. Rise in exports to India by 2.3 percent and to other countries by 58.4 percent mainly helped exports to catch encouraging trend,” states the report.
During the period, Nepal witnessed exports of readymade garments growing by 5 percent and woolen carpet by 21 percent. Exports of pashmina and pulses also increased substantially.
Higher growth in imports compared to exports caused the trade deficit to soar by 28 percent and cross over Rs 115 billion during the first seven months of the fiscal year.
Higher remittances inflow and relatively better performance of exports contributed the gross foreign exchange reserves to grow by 18.4 percent to Rs. 251.79 billion in the first seven months of the fiscal year. On the basis of US dollar, gross foreign exchange reserves rose by 4.4 percent to US$ 3.24 billion in mid-February 2009.
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