KATHMANDU, Nov 14: Imports have skyrocketed amid declining remittance inflows to the country and declining dollar reserves. Compared to last year, imports have increased by 63.73 percent in the first three months of the current Fiscal Year. Trade deficit has increased by 58 percent to Rs 413 billion.
In the first three months of the current fiscal year, goods worth Rs 475 have been imported by Nepal. According to the Department of Customs, goods worth Rs. 478.32 billion have been imported till mid-October of the current fiscal year- FY 2021/22. This is 63.73 percent more than last year. Goods worth Rs 292.26 billion were imported in the corresponding period of the previous year.
Imports have increased as most of the goods have to be imported due to lack of increase in domestic production. Imports of petroleum products, vehicles, spare parts, soybean oil, gold and silver and other commodities have increased. Imports of chemical fertilizers, cement, tobacco, sugar, pulses and other commodities have declined.
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Exports have totaled Rs 65.05 billion in the last three months. Although exports increased by 109 percent compared to last year, the share of exports is very small. Goods worth Rs 31 billion were exported in the corresponding period last year.
Most exports are made to India. Exports of soybean oil, palm oil, jute goods, yarn and other commodities have increased. However, exports of tea, ayurvedic medicine, wire, zinc sheets, cardamom and other commodities have declined.
Although it is natural to import petroleum products and industrial raw materials which are not produced in the country, goods that can be produced here are also being imported from abroad. Lack of increase in industrial production, imports of goods that can be domestically produced and agricultural commodities are not considered good for the economy.
Economists say rising imports of daily necessities and rising trade deficits are a matter of concern. The country's trade deficit has increased by 58 percent compared to last year.
Dollars are needed to buy goods. Nepal earns very little dollar from exports. The share of exports in the total foreign trade is only about 12 percent. After COVID-19 pandemic hit the country, tourism was staggering and it was dependent on remittances.
According to the latest data released by Nepal Rastra Bank (mid-July to mid-September), the inflow of remittances has decreased by 6.3 percent. A total of Rs 155.37 billion remittances have come in two months. Despite an increase of 8.1 percent in the corresponding period last year, a decline in remittances this year is likely to affect the economy.
