Nepal's exports decline

The Nepal Rastra Bank (NRB) first four-month's macroeconomic report paints the foreign trade picture more gloomier than last year. In the first four months of 2007-08, total exports declined by 6.3 percent in contrast to a rise of 1.4 per cent in the corresponding period last year, the report states.
Of the total exports, export to India decreased by 7.8 per cent compared to a marginal growth of 0.2 per cent in the same period of 2006-07. Exports to other countries also posted a decline of three per cent in contrast to a rise of 3.9 per cent in the comparable period of the previous year.
The decline in the exports of vegetable ghee, toothpaste, textiles, chemicals and pulses to India and woolen carpet, pashmina, readymade garments, Nepali paper and paper products and tanned skin to other countries contributed to the decline in exports in the review period, states the first four-month's report of the central bank.
Total imports grew merely by one per cent compared to a growth of 10.8 per cent in the corresponding period last year. "While imports from India went up by 2.2 per cent in the review period compared to a growth of 10.4 per cent in the previous year, imports from other countries fell by 0.9 per cent in contrast to a rise by 11.5 per cent in the previous year," the report states.
A rise in the import of vehicles and spare parts, MS billet, hot rolled sheet in coil, cold rolled sheet in coil and pipe and pipe fittings, among others, from India and substantial increase in the import of gold followed by telecommunication equipment and parts, electrical goods, transport equipment and parts and other machinery and parts, among others, from other countries led to the slight rise in total imports in the first four months of 2007-08.
Similarly, the overall balance of payments (BoP) recorded a deficit of Rs 3.61 billion in the first four months of 2007-08. The BoP had registered a surplus of Rs 180.8 million in the corresponding period of the previous year.
The gross foreign exchange reserves declined by 1.2 per cent from the level of 2007 and stood at Rs 163.12 billion in mid-November 2007. According to the report, such reserves had declined by 0.4 per cent in the corresponding period of the preceding year. In terms of US dollar, gross foreign exchange reserves rose by 1.6 per cent to $2.59 billion in mid-November, 2007. In the same period of the previous year, such reserves had risen by 2.1 per cent.
On the basis of the import figures for the first four months of 2007-08, the current level of reserves is sufficient for financing merchandise imports of 10.4 months and merchandise and service imports of 8.1 months.