KATHMANDU, June 11: Nepal’s economy is showing gradual signs of recovery, with the latest data from Nepal Rastra Bank (NRB) indicating improvements across major macroeconomic indicators.
According to the Current Macroeconomic and Financial Situation Report for the first ten months of Fiscal Year 2024/25, released on Tuesday, the country has witnessed positive trends in inflation, foreign exchange reserves, private sector lending, and the balance of payments.
Consumer inflation dropped to 2.77 percent in mid-April to mid-May, down from 4.40 percent during the same period last fiscal year. Food and beverage inflation fell sharply to 1.52 percent, providing relief to households. The inflation rate in the Kathmandu Valley was 2.64 percent, the Terai region was 2.64 percent, the Hills region was 2.65 percent, and the Mountain region was the highest at 4.01 percent.
Nepal's robust external sector performance outshines sluggish i...
Likewise, the loan issuance by the BFIs also surged a notable amount in the first 10 months of the current FY. According to the NRB records, the BFIs issued loans worth Rs 368 billion, showing a growth of 7.3 percent compared to mid-July, 2024. During the same period last year, their loan investments had increased just 4.7 percent, totaling Rs 225.24 billion.
The cash balance with the government account stood at Rs 360.98 billion as of the first 10 months this year. The amount grew four-folds from Rs 93.96 billion in mid-July, the beginning of the current FY.
Similarly, the country’s balance of payments (BoP) surplus increased to Rs 438.52 billion. In the same period of the previous year, the BoP surplus stood at Rs 392.64 billion. In US dollar terms, the BoP surplus surged to 3.23 billion from 2.95 billion in the review period.
The current account surplus also increased to Rs 255.93 billion from Rs 193.31 billion. In US dollar terms, the current account surplus jumped to 1.89 billion from 1.45 billion. Likewise, remittance inflow also increased by Rs 165.30 billion last month, taking the total inflow amount to Rs 1.356 trillion as of mid-May this year.
During the 10 months of FY 2024/25, merchandise exports increased 72.7 percent to Rs 217.91 billion against a decrease of 3.6 percent in the same period in the last FY. It was the first time that Nepal’s export earnings had reached this level.
On the other hand, merchandise imports increased 13.1 percent to Rs 1.474 trillion against a decline of 2.4 percent a year ago. The share of capital goods in total imports, however, declined to 8.9 percent from 9.3 percent.
According to the NRB statistics, the country’s public finance has also improved marginally. The capital expenditure stood at Rs 120.38 billion, a growth of 7.6 percent compared to a decline of 11 percent in the corresponding period of last year. The revenue collection of the government also witnessed a growth of 10.9 percent to Rs 922.43 billion. In the same period last year, the growth rate of the government revenue collection was 10 percent.
