KATHMANDU, June 29: Trade deficit widened by 17.4% in the first 11 months of the current fiscal year 2018/19 to Rs 1,211.97 billion.
The trade deficit of the country has now even surpassed the government’s budget for the upcoming fiscal year. The government has revised its budget spending target to Rs 1,199.5 billion for the upcoming fiscal year – FY2018/19.
However, the growth of exports, which has remained sluggish for a long time, outpaced imports in the first 11 months of the current fiscal year.
According to data from the Department of Customs, total imports of the country rose 17.45% to Rs 1,299 billion while exports climbed 18.18% to Rs 87.83 billion in the review period.
The imports to exports ratio of the country has also fallen marginally to 14.8 in the review period from 14.9 in the corresponding period of the last fiscal year. This means the country has imported goods worth Rs 14.8 against export of one rupee in the first 11 months of the current fiscal year.
Experts attributed the surge in the exports combined with the recent restrictions on imports to the drop in the imports to exports ratio.
As the foreign earnings from the exports have not gone up much, the country has to burn through the foreign exchange reserves earned from tourism earnings and remittances.
The widening trade deficit has also worsened the external sector position of the country.
The balance of payment is continuously slipping into deficit as the earnings from exports a s well as other sources have failed to offset the payment of the import bill.
As always, the trade deficit with India remained highest.
According to the data, Nepal registered a traded deficit of Rs 785.09 billion in the review period.
This was followed by China with whom the trade deficit slipped to Rs 184.64 billion.
Exports to China have been on a declining trend in recent months, driving up the trade deficit with the northern neighbor.
Trade experts say that the country has not been able to produce much to exports or substitute imports to arrest the ballooning trade deficit of the country.
According to the data, Nepal imports cereals worth Rs 47.97 billion in the review period.
Vehicles (Rs 84.42 billion), aircraft/spacecraft (Rs23.06 billion) and machinery and mechanical appliances (Rs 109.88 billion) and iron and steel (Rs 132.31 billion) were other major imported commodities in the review period, according to the data.
Similarly, the major commodities that Nepal exported include carpets (Rs 7.05 billion), iron and steel ( Rs 5.4 billion) and textiles ( Rs 3.6 billion).