Imports grow six times to exports, Remittance growth slows down to 10.2 per cent, BoP still deficit at Rs 17.36 billion

The country is still witnessing the overall Balance of Payment (BOP) deficit that stands at Rs 17.36 billion in the 10 months of 2009-10 against a surplus of Rs 43.06 billion in the same period last year, the central bank . In the first nine nine months the BoP deficit stood at Rs 22 billion.
"Due to large trade deficit coupled with a decelerated remittance growth led to a huge current account deficit at Rs 34.78 billion against a surplus of Rs 37.04 billion in the same period last year," said the Nepal Rastra Bank's macroeconomic report of the first 10 months (till mid-May).
Nepal received Rs 186.44 billion in remittance, 10.2 per cent up against the 55.5 per cent growth in the same period of last financial year.
"On a monthly basis, the remittance inflows grew by 14.7 per cent in April-May compared to a growth of 25.7 per cent in the same month of the previous year," said the report.
The gross foreign exchange reserves, however, declined by 14.9 per cent to Rs 238.34 billion in mid-May from a level of Rs 279.99 billion in mid-July 2009. But such reserves had increased by 33.3 per cent to Rs 283.43 billion in the same period last year.
"NRB's reserves declined by 17.4 per cent to Rs 185.29 billion from a level of Rs 224.19 billion in mid-July 2009," it said adding that the gross foreign exchange reserves in dollar terms declined by 7.5 per cent to $3.32 billion in mid-May from a level of $3.59 billion in mid-July 2009.
"Such reserves had increased by 15.4 per cent to $3.58 billion in the same period last year," the NRB added. "The widening of the current account deficit resulted in the depletion of foreign exchange reserves.
Based on the trend of import in the ten months of the current fiscal, the current level of reserves is sufficient for financing merchandise imports of 7.9 months and merchandise and service imports of 6.6 months.
Similarly, The free-on-board (FOB)-based merchandise trade deficit grew by 52.1 per cent to Rs 251.16 billion comapred to a deficit of 27.4 per cent to Rs 165.16 billion in the same period last year.
Though, total government spending increased by 25.1 per cent to Rs 159.6 billion compared with an increase of 25.7 per cent in the same period last year, the government budget surplus on cash basis stood at Rs 7.1 billion compared with a surplus of Rs 6.1 billion in the same period last year, according to the report.
Similarly, exports has plummetted by over six times than the imports. "The merchandise exports declined by 11.2 per cent to Rs 50.20 billion against the growth of 19.5 per cent to Rs 56.54 billion in the same period last year," it said adding that exports to India alone declined by seven per cent in contrast to a growth of 10.4 per cent. Likewise, exports to other countries plummeted by 18.2 per cent against a growth of 38.2 per cent in the same period last year.
The merchandise imports, on the other hand, has grown by 35.6 per cent to Rs 309.88 billion against the growth of 25.4 per cent to Rs 228.54 billion in the same period last year.
Imports from India grew by 35.3 per cent compared with a growth of 10.5 per cent in the same period last year. Likewise, imports from other countries grew by 36 per cent compared with a growth of 52.2 per cent in the same period last year.