NRB waxes eloquent on nation's economy

Except for the price hike and spending on developing activities, Nepal Rastra Bank (NRB) has painted a rosy picture of the country's economy.
According to the current macro-economic report published by the central bank and based on the first five months of the current fiscal year, the government has collected revenue according to its target, exports are increasing and the Balance of Payment (BoP) is surplus.
However, the government has totally failed to control the price rise which at 14.1 per cent in mid-December 2008 from 5.7 per cent in the same period the last fiscal year.
"Revenue mobilisation grew by 33.1 per cent to Rs 43.1 billion compared to an increase of 21 per cent in the same period the last fiscal," said the central bank's report.
The revenue growth is attributed to high growth of income tax, VAT revenue, excise, vehicle tax and registration fee as well as high growth in non-tax revenue. But capital expenditure declined by 34.3 per cent to
Rs 4.9 billion in contrast to an increase of 120.3 per cent in the first five months of last fiscal year, said the bank.
In the first five months of 2008-09, the government budget remained at a surplus of Rs 2.2 billion in contrast to a deficit of Rs 9.8 billion in the corresponding period the previous year. An increase in revenue and foreign cash grants accounted for such a budget surplus in the review period.
During the period, the total government spending increased by 2.5 per cent to Rs 48.5 billion compared to an increase of 44.3 per cent in the same period last fiscal year.
Similarly, exports rose by 30.9 per cent during the period in contrast to a decline of 4.4 per cent last year. "Exports to India increased by 15.1 per cent as against a decline by nine per cent in the same period last fiscal year," it said adding that exports to other countries also soared by 64 per cent compared to an increase of 6.9 per cent.
Total imports also went up by 32.6 per cent in comparison to an increase of 8.2 per cent in the same period. Imports from India increased by 17.1 per cent in the review period against a growth of 10.7 per cent in the same period of 2007-08. "Imports from other countries have also surged by 57.2 per cent compared to a growth of 4.5 per cent a year earlier," the data revealed.
The overall balance of payment (BoP) recorded a significant surplus of Rs 22.8 billion compared to a surplus of Rs 31.1 million the last fiscal year.
Remittance soared by 65.8 per cent in the first five months against a growth of 17.6 per cent in the same period last fiscal year. The gross foreign exchange reserve also is in a comfortable situation. "It stood at Rs 235.6 billion by mid-December with an increment of 10.8 per cent compared to the level as at mid-July 2008," the report said.

FM, donors discuss
KATHMANDU: Finance Minister Dr Baburam Bhattarai has briefed the donor community about the current economic situation and promised them of expediting development activities from the next month. "Due to delay in budget presentation by two months, the government has not been able to spend on development activities but it would be expedited from next month," he promised.