Import-Export gap still widening

The country imports Rs 13.8 worth merchandise, if it exports Rs 1 worth, according to the annual data of the central bank.

The ratio of export to import declined to 13.8 per cent in the last fiscal year 2012-13, from 16.1 per cent a fiscal year ago, reported the central bank’s macroeconomic report for fiscal year 2012-13.
Likewise, trade deficit has widened by Rs 479.82 billion – exceeding the budget of Rs 404 billion – due to low export as it increased by only Rs 2.66 billion or 3.6 per cent to Rs 76.92 billion during the last fiscal year compared to a fiscal year ago, when the country had exported Rs 74.26 billion worth merchandise.

But the import has surged by 20.6 per cent to Rs 556.74 billion – around one third of the total GDP – during last fiscal year compared to an increase by 16.5 per cent to Rs 461.67 billion a fiscal year ago.

India with 66 per cent share in the total Nepal’s trade, is the largest trade partner as usual, with imports from India soared by 22.3 per cent compared to a growth of 14.3 per cent a fiscal year ago in 2011-12.

The appreciating US dollar, though helped remittance inflow that stood at Rs Rs 434.58 billion – exceeding the budget of Rs 404.82 billion by Rs 29.76 billion – failed to help exporters fetch more US dollar as the third countries exports increased to Rs 25.9 billion — an increment by a mere 5.2 per cent — compared to a growth of 17.5 per cent a fiscal year ago.

The Balance of Payment (BoP) reported a surplus of Rs 68.94 billion compared to a surplus of Rs 131.63 billion a fiscal year ago, the report said, attributing the surplus to current account that posted a surplus of Rs 57 billion due to service income surplus of Rs 7.59 billion and net transfers composing of remittance income.

The gross foreign exchange reserves, however, increased by 21.4 per cent to Rs 533.30 billion which stood at Rs 439.46 billion a fiscal year ago. On the basis of current trend of imports, the existing level of reserves is sufficient for financing merchandise imports of 11.7 months and merchandise and service imports of 10.1 months, according to the central bank report.

FDI commitment up

KATHMANDU: Though, the government announced 2012-13 as the Nepal Investment Year, foreign direct investment (FDI) commitment has increased by 171.7 per cent in the last fiscal year, according to the central bank data. “The number of joint venture projects has increased by 32 per cent, according to the Department of Industry. “The department granted 300 joint venture projects with FDI commitment of Rs 19.39 billion,” it said, adding that a fiscal year ago in 2011-12, some 227 joint venture projects were approved with a total investment of Rs 7.14 billion. “Out of 300 approved projects, some 87 were tourism related, 85 services, 77 manufacturing, 42 agriculture, four energy, four mineral and one construction related project.” Country-wise, China is the largest investor with 96 industries, followed by India with 37, South Korea 24, USA 22 and remaining 121 from other countries. These projects were expected to generate direct employment opportunities for some 14,895 people, the report added.

Fiscal Year 2012-13 in figures:

·        Export increased by only Rs 2.66 billion to Rs 76.92 billion in the last fiscal year 2012-13 compared to a fiscal year ago’s Rs 74.26 billion.

·        Petroleum products – the largest import – accounts for 19.24 per cent to Rs 107.13 billion of the total import of Rs 556.74 billion in the last fiscal year.

·        Trade deficit that stood at Rs 479.82 billion exceeds the budget of Rs 404.82 billion by Rs 75 billion.

·        Remittance inflow Rs 434.58 billion exceeds budget of Rs 404.82 billion by Rs 29.76 billion.

·        Inflation stood at 9.9 per cent, though the target was to contain at seven per cent. It was 8.8 per cent a fiscal year ago.

·        FDI commitment up to Rs 19.39 billion with 300 projects.

·        China with investment commitment in 96 industries becomes the largest FDI source country.

·        The gross foreign exchange reserves increased to Rs 533.30 billion.

·        A total of 453,543 youths went abroad for foreign employment with Malaysia topping the chart with 156,770.

·        Of the total Rs 404.82 billion budget, the government spent only Rs 347.74 billion; Rs 47.15 billion under capital expenditure and Rs 237.99 billion under recurrent expenditure.

·        A total number of Class A, B, C, D and institutions that have limited banking permission reduced to 254 from a fiscal year ago’s 266 due to merger.

·        Commercial banks have some 1,486 branches, development banks 764, finance companies 242 and microfinance development banks 634 branches.

·        A branch covers around 8,475 population by the end of the last fiscal year 2012-13.

·        The loan and advances of BFIs increased by 18.6 per cent to Rs 180.20 billion compared to a growth of 13.2 per cent to Rs 112.78 billion a fiscal year ago.

·        Government mobilised Rs 296.01 billion revenue against the target of Rs 289.61 billion.

·        A total of 586,668 foreign tourists visited Nepal via air compared to 595,262 a fiscal year ago.