KATHMANDU, Nov 30: Nepal’s overall trade deficit has decreased by 4 percent in the first three months of the current fiscal year (2024/25).
According to Nepal Rastra Bank (NRB), total goods exports decreased by 6.1 percent, reaching Rs 38.38 billion. Similarly, goods imports decreased by 4.2 percent, totaling Rs 390.75 billion.
Compared to the same period last year, the trade deficit has decreased by 4 percent, standing at Rs 352.37 billion. Similarly, remittance inflows have increased by 11.5 percent, reaching Rs 473.1 billion. In the same period of the previous year, remittance inflows had increased by 25.5 percent, reaching Rs 365.37 billion.
In the first quarter of the current fiscal year, the current account shows a surplus of Rs 111.87 billion, and the balance of payments is in surplus by Rs 184.99 billion. In the same period of the previous fiscal year, the current account had a surplus of Rs 59.65 billion, and the balance of payments had a surplus of Rs 110.66 billion.
Trade deficit shrinks by 12% in first quarter
The average consumer inflation rate is 4.26 percent. In the month of Ashoj (mid-September to mid-October), the annual point-to-point consumer inflation rate was 4.82 percent. In the same month of the previous year, the inflation rate was 7.50 percent.
Due to the high price increases in the vegetable and pulse sub-groups, the inflation rate for the food group on an annual point-to-point basis in Ashoj 2081 BS is 7.18 percent, while the inflation rate for the non-food and services group is 3.50 percent.
In the same month of the previous year, the inflation rates for these groups were 8.48 percent and 6.85 percent, respectively.
In the month of Ashoj, the annual point-to-point wholesale inflation rate is 5.51 percent. In the same period of the previous year, the wholesale inflation rate was 2.78 percent. Similarly, the wage and salary index has increased by 3.36 percent. In the same period of the previous year, this index had increased by 5.65 percent.
A policy has been adopted to manage monetary policy in a way that keeps inflation around 5 percent for the current fiscal year. In the first three months, the average consumer inflation rate is 4.26 percent. In the month of Ashoj, the price increase in the food and beverage group was 7.18 percent, and the price increase in the non-food and services group was 3.49 percent, resulting in an annual point-to-point consumer inflation rate of 4.82 percent.
The monetary policy aims to maintain foreign exchange reserves sufficient to cover at least seven months of goods and services imports. As of the end of Ashoj, foreign exchange reserves are sufficient to cover 14.5 months of goods and services imports.
The policy arrangement outlined in the monetary policy has been implemented, adjusting the upper limit of the interest rate corridor from 7 percent to 6.5 percent and the policy rate from 5.5 percent to 5 percent. In the first quarter of the current fiscal year, the weighted average interbank rate of banks and financial institutions is 3 percent.
For the fiscal year 2024/25, it was projected that the broad money supply would increase by 12 percent and credit flow to the private sector from the monetary sector would increase by 12.5 percent. However, as of the end of Ashoj, on an annual point-to-point basis, the broad money supply has increased by 13.3 percent, and credit to the private sector has increased by 6.2 percent.
