Trade deficit balloons, remittance touches Rs 320.38 billion

Merchandise exports rose by 16.3 per cent to Rs 67.21 billion during the 11 months of fiscal year 2011-12, whereas imports increased by 16.8 per cent to Rs 419.57 billion making a huge trade deficit of Rs 352.36 billion.
"Such exports had increased by 4.9 per cent to Rs 57.78 billion during the same period of the last fiscal year, whereas imports had risen by only six per cent to Rs 359.33 billion during the same period of the last fiscal year," the central bank data revealed.
Total trade deficit during the 11 months of the fiscal year 2011-12 went up by 16.8 per cent to Rs 352.36 billion. Trade deficit had increased by 6.2 per cent during the corresponding period of the previous year. Trade deficit with India increased by 13 per cent during the review period as compared to a growth of 26.2 per cent during the corresponding period of the previous year. Trade deficit with other countries increased by 24.5 per cent in contrast to a drop by 19.4 per cent during the same period of the previous year.
Exports to India went up by 16.7 per cent as compared to an increase of 7.5 per cent during the same period of the last fiscal year, whereas exports to other countries increased by 15.6 per cent.
The increase in exports to India was primarily attributed to the increase in the exports of textiles, cardamom, polyester yarn, copper wire rod and GI pipes, while the increase in exports to other countries was due to the rise in the export of woollen carpets, pashmina, readymade garments, tanned skin and Nepali paper and paper products, it added.
Imports from India rose by 13.6 per cent as compared to a growth of 22.8 per cent during the same period of the last fiscal year. Likewise, imports from other countries soared by 23.1 per cent against a decline by 16.8 per cent during the same period of the last fiscal, the central bank said, adding that the increase in the import growth led to a slight reduction in the export to import ratio to 16 per cent from 16.1 per cent a year back.
However, the overall Balance of Payment (BoP) recorded its highest ever surplus of Rs 113.22 billion during the 11 months of fiscal year 2011-12 due to current account surplus of Rs 61.56 billion and substantial rise in the growth of remittance and the improvement in the service account.
"Net service account witnessed a surplus of Rs 14.23 billion in contrast to a deficit of Rs 8.69 billion during the same period of the last fiscal year," it said, adding that under services, tourism income rose by 25.5 per cent.
Net transfers registered a growth of 35.2 per cent to Rs 377.1 billion as compared to that of a year back. Under transfers, workers' remittance surged by 39.6 per cent to Rs 320.38 billion as compared to a growth of 10.1 per cent during the same period of the last fiscal year.
Likewise, under the financial account, foreign direct investment of Rs 8.1 billion was recorded against Rs 6.1 billion during the same period a year ago.
The gross foreign exchange reserves surged by 56.9 per cent to Rs 427.01 billion in mid-June 2012. On the basis of the trend of imports, the current level of reserves is sufficient for financing merchandise imports for 11.4 months, and merchandise and service imports for 10.1 months, the central bank added.


Price continues to increase
KATHMANDU: The year-on-year inflation as measured by the consumer price index increased by 9.9 per cent in mid-June 2012 as compared to 8.8 per cent in the same period of the last fiscal year. The indices of food and beverage group and non-food and services group both increased by 9.9 per cent against an increase of 14.3 per cent and 4.3 per cent, respectively in the same period of last fiscal year. While the year-on-year rate of inflation in mid-May was 8.7 per cent, there was additional pressure on consumer price in mid-June 2012 due to the adverse impact on supply arising from the strikes and bandhs as well as the increase in the price of imported commodities because of the significant weakening of the Nepali rupee. As a result, the average inflation rate for the first 11 months has increased to eight per cent.