Consumer price hike eased on the back of deceleration in rise in prices of clothes, footwear, furniture and household equipment, the latest macroeconomic report of Nepal Rastra Bank shows. Slower hike in transport and health costs also helped inflation to ease in the month, the report states.[break]
In one-year period to April, prices of clothes and footwear went up by 10 percent than 15.1 percent recorded in the same period last year. Hike in prices of furniture and household equipment also eased to 12.1 percent in the one-year period, as against 13.6 percent registered in the same period a year ago.
Similarly, transport and health costs rose by 7.6 percent and 5.4 percent, respectively, in one-year period to April, in comparison to hike of 17.8 percent and 7.7 percent seen a year ago.
During the period, prices of most of the food items, however, surged, exerting pressure on low-income group which spends significant portion of disposable income to purchase rice, lentil, vegetables, cooking oil and spices.
In the period, prices of cereal grains and their products surged by 13.5 percent, while prices of legume varieties shot up by 11.8 percent. Similarly, prices of meat and fishes climbed by 16.2 percent and prices of ghee and oil rose by 10.3 percent in the period.
Price hike in Nepal is generally attributed to rise in prices of commodities in India, from where Nepal imports most of the goods.
Imports from India went up by 22.9 percent in the first nine months of the current fiscal year, shows the report, as against the increment of 13.1 percent recorded in the same period last year. Similarly, imports from other countries rose by 15.5 percent in the nine-month period compared to a hike of 28.3 percent reported in the same period a year ago.
Overall, Nepal´s merchandise imports surged by 20.3 percent to Rs 408.83 billion in the first nine months of the current fiscal year.
In contrast, Nepal´s exports in the period went up by marginal 3.5 percent to Rs 57.16 billion, the report shows. In the same period last fiscal year, exports had gone up by 15.9 percent to Rs 55.24 billion.
Nepal´s total exports grew at a tepid pace as exports to India increased by a marginal 0.4 percent during the period, as against a rise of 18.4 percent recorded in the same period last year.
Exports to other countries, on the other hand, went up by 10 percent in the nine-month period.
As imports surpassed exports, Nepal´s trade deficit surged by 23.6 percent to Rs 351.67 billion in the period. This, in turn, played a major role in causing the country´s current account surplus-difference between exports and imports of goods and services and transfers from the country and aboard-to shrink to Rs 22.23 billion in the nine-month period as against a surplus of Rs 41.95 billion recorded in the same period last year.
Nepal managed to post a current account surplus despite widening trade deficit because of 21.9-percent growth in workers´ remittances to Rs 302.58 billion. In the same period last year, workers remittance had surged by 36.5 percent, indicating lower growth rate this year.
At the same time, the net service income posted a surplus of Rs 4.56 billion in the nine-month period compared to a surplus of Rs 12.49 billion in the same period last year.
As current account surplus shrank due to widening trade deficit, the overall balance of payments -- the country´s total transaction with other nations -- surplus narrowed to Rs 30.77 billion in the first nine months as against Rs 92.55 billion recorded in the same period last year.
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