According to the Current Macroeconomic Situation of Nepal Report unveiled by Nepal Rastra Bank (NRB) on Thursday, country's trade imbalance widened by 8.7 percent to Rs 56.12 billion between mid-July and mid-August. Trade deficit had gone up by 16.6 percent to Rs 51.64 billion in the same period of 2014/15.As usual, Nepal's trade deficit with India, the largest trading partner, increased by 7.4 percent to Rs 37.78 billion. Similarly, trade deficit with China climbed up by 39.1 percent to Rs 8.4 billion. Such deficit with India and China had gone up by 22.2 percent and 27.3 percent, respectively, in the same period of the previous fiscal year.
Nepal had suffered trade deficit of Rs 35.18 billion and Rs 6.03 billion with India and China, respectively, in the same period in 2014/15.
Trade deficit with other countries, however, decreased by 4.6 percent to Rs 9.9 billion in the review period, compared to a rise of 15.8 percent to Rs 10.42 billion in the corresponding period of 2014/15.
According to the report, country's merchandise exports fell 3.9 percent to Rs. 6.46 billion in the first month of 2015/16. Likewise, exports to India fell 6.2 percent to Rs 3.79 billion in the review period. "Exports to India decreased mainly due to drop in exports of zinc sheet, GI pipe, wire and textiles, among others," the report states.
Likewise, exports to China fell by a marginal 0.5 percent to Rs 87.4 million in the review month, compared to a drop of 56.7 percent to Rs 87.8 million in the same period of the previous year.
"This drop is mainly due to fewer exports of tanned skin and rudraksha beads, among others," the report added.
Similarly, exports to other countries dropped by a nominal 0.3 percent in the review month.
Nepal's merchandise imports increased by 7.2 percent to Rs 62.58 billion in the review month. Imports from India and China in the review month increased by 6 percent and 38.6 percent, respectively, to Rs 41.58 billion and Rs 8.48 billion.
According to the report, import growth from India is mainly due to rise in import of vehicles and spare parts, cold rolled sheet in coil, MS billet and MS wire rod, among others. Likewise, imports from China rose due to growth in import of chemical fertilizers, readymade garments, footwear products, and vehicles and spare parts, among others.
REMITTANCE UP, BOP IN SURPLUS
Meanwhile, remittance flow increased by 26.3 percent to Rs 53.27 billion in the review month compared to a growth of 0.8 percent in the same period of the previous fiscal year. The country had received remittances worth Rs 42.19 billion in the first month of the previous fiscal year.
Likewise, country's overall balance of payment (BOP) was at a surplus of Rs 4.95 billion in the review period compared to a surplus of Rs 2.77 billion in the same period of the previous fiscal year.
INFLATION MODERATES TO 6.9%
Inflation, measured by Consumer Price Index (CPI), moderated to 6.9 percent in mid-August 2015, compared to 7.5 percent in the corresponding period of last fiscal year, according to Current Macroeconomic Situation of Nepal Report unveiled by Nepal Rastra Bank (NRB) on Thursday.
The inflation stood below last year's level apparently due to the central bank's revision on the basket of goods and services as per the results of the 5th Household Budget Survey conducted recently. Experts say the real price rise as general public assume may not be reflected in the CPI since it's the index of the average price of 496 goods and services that include food and beverage items as well as non-food and services group.
According to the report, the indices of food and beverage group jumped 7.3 percent while non-food and services group's indices rose by 6.6 percent during the review period.
The central bank had conducted 5th Household Budget Survey to update the basket of goods and services and their weights for constructing national consumer price index. The survey collected information on household income and expenses from 8,028 households selected from 207 wards of 84 market centers that covered 55 districts of the country.
From the survey results, the weight for food and beverage group was found to be 43.91 percent whereas the weight for non-food and service group was found to be 56.09 percent. The base year for the new series of CPI is 2014/15.
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