Remittance growth slows on drop in number of outbound workers
March 18, 2017 01:10 AM NPT
Inflation cools down to 3.3 percent
KATHMANDU, March 18: Growth rate of remittances inflow continued to decline in the first seven months of the current fiscal year.
According to the Current Macroeconomic and Financial Situation of Nepal (Based on Seven Months' Data of 2016/17) released by Nepal Rastra Bank (NRB) on Thursday, the remittances inflow grew by only 5.2 percent to Rs 394.57 billion in the review period, compared to a growth of 16.9 percent in the corresponding period of the last fiscal year 2015/16.
Nepal had received a total of Rs 375.16 billion in remittances in the seven-month period in the last fiscal year.
Experts attribute the fall in the number of outbound workers in recent months to slowdown in remittance growth.
Similarly, the current account slipped into deficit by Rs 10.66 billion in mid-February 2017 on account of sharp increase in imports. The current account was in significant surplus of Rs 154.78 billion in the same period of the previous year. Merchandise imports increased 60.8 percent to Rs 556.16 billion in the review period in contrast to a drop of 21.6 percent in the same period of the previous year. The overall Balance of Payment (BoP) recorded a surplus of Rs 36.98 billion in the review period compared to a surplus of Rs154.40 billion in the same period of the previous year.
Total trade deficit widened 66.2 percent to Rs 513.98 billion in the first seven months of 2016/17 compared to a contraction of 20.9 percent in the same period of the previous fiscal year.
Inflation cools down
Consumer price inflation has moderated to 3.3 percent in mid-February 2017 from the 11.3 percent in mid-February 2016.
The year-on-year inflation has been continuously decelerating in recent months due mainly to the previous year's base price effect, improved supply situation and moderate Indian inflation, according to the monthly report of the NRB.
Food inflation remained negative, growing by only 0.2 percent in mid-February 2017 from 12.8 percent in the corresponding period of the last fiscal year. The non-food inflation also moderated to 6.1 percent during the review period from 10.1percent in the corresponding period of the previous year. The decline in prices of clothes and footwear, housing and utilities, education, communication, transportation, among others contributed to the moderation in non-food inflation in the review period, according to the report.
Similarly, the difference between inflation rates in Nepal and India has also narrowed down to 0.4 percent. The year-on-year consumer price inflation was 3.7 percent in India in February, 2017 compared to 3.3 percent in Nepal. In the corresponding month of the previous year, such difference was at 5.2 percent.