Contrary to the Prime Minister KP Sharma Oli's claim – in the House couple of weeks ago – that the economy is faring well, a significant rise in the import bill and slower exports growth has put excessive pressure in the country’s current account lately.
According to the macroeconomic report – of the first five months of the current fiscal year 2018-19 published by the central bank today – revealed that the current account has registered a deficit of Rs 119.33 billion following a whopping rise in import of merchandise goods against a deficit of Rs 64.11 billion during the same period in the last fiscal year.
The merchandise imports have increased by 34.2 per cent to Rs 607 billion in the first five months of this fiscal year compared to an increase of 18.2 per cent during the same period in the last fiscal year. But the merchandise exports have increased by only 11.2 per cent to Rs 37.50 billion till mid-December in 2018-19 compared to an increase of 10.1 per cent during the same period in the last fiscal year, the central bank report reads. "As a result, the total trade deficit has further widened by 36.1 per cent to Rs 569.49 billion in five months of the current fiscal year, whereas the export-import ratio has declined to 6.2 per cent from 7.5 per cent in the same period of last fiscal year."
The import of commodities like petroleum products, vehicle and spare parts, aircraft spare parts, MS billet, machinery and parts, vegetables, fruits and rice has seen an increase, which pushed the import bill upwards. "Rising import has exerted pressure on the overall balance of payments (BoP) situation as it remained at a deficit of Rs 85.32 billion in the first five months of the current fiscal year compared to a deficit of Rs 5.48 billion in the same period of a fiscal year ago," the report further reads, adding that the workers’ remittance has however increased by 31.9 per cent to Rs 376.59 billion in the same period against a decrease of 0.8 per cent in mid-December of the last fiscal year. "The consumer price inflation stood at 3.7 per cent in mid-December 2018 compared to 4.2 per cent during the same period in the last fiscal year."
The inflation rate has been at the exact level, the Prime Minister Oli had reported last month in the House, though the calculation of the inflation was not out by then. The central bank calculates the inflation rate prepares the macroeconomic report every month. It takes atleast one month to calculate all the economic indicators. But matching of the premier's early announcement of the inflation rate and central bank's calculation creates some suspicious on the central bank's intention and its wish to please the Prime Minister by putting the central bank's integrity, authenticity and national economic indicator's global acceptance. After intellectual's question on his misleading the data, the premier had then replied that the majority government led by him 'will create its own data'.
According to the macroeconomic report – of the first five months of the current fiscal year 2018-19 published by the central bank today – revealed that the current account has registered a deficit of Rs 119.33 billion following a whopping rise in import of merchandise goods against a deficit of Rs 64.11 billion during the same period in the last fiscal year.
The merchandise imports have increased by 34.2 per cent to Rs 607 billion in the first five months of this fiscal year compared to an increase of 18.2 per cent during the same period in the last fiscal year. But the merchandise exports have increased by only 11.2 per cent to Rs 37.50 billion till mid-December in 2018-19 compared to an increase of 10.1 per cent during the same period in the last fiscal year, the central bank report reads. "As a result, the total trade deficit has further widened by 36.1 per cent to Rs 569.49 billion in five months of the current fiscal year, whereas the export-import ratio has declined to 6.2 per cent from 7.5 per cent in the same period of last fiscal year."
The import of commodities like petroleum products, vehicle and spare parts, aircraft spare parts, MS billet, machinery and parts, vegetables, fruits and rice has seen an increase, which pushed the import bill upwards. "Rising import has exerted pressure on the overall balance of payments (BoP) situation as it remained at a deficit of Rs 85.32 billion in the first five months of the current fiscal year compared to a deficit of Rs 5.48 billion in the same period of a fiscal year ago," the report further reads, adding that the workers’ remittance has however increased by 31.9 per cent to Rs 376.59 billion in the same period against a decrease of 0.8 per cent in mid-December of the last fiscal year. "The consumer price inflation stood at 3.7 per cent in mid-December 2018 compared to 4.2 per cent during the same period in the last fiscal year."
The inflation rate has been at the exact level, the Prime Minister Oli had reported last month in the House, though the calculation of the inflation was not out by then. The central bank calculates the inflation rate prepares the macroeconomic report every month. It takes atleast one month to calculate all the economic indicators. But matching of the premier's early announcement of the inflation rate and central bank's calculation creates some suspicious on the central bank's intention and its wish to please the Prime Minister by putting the central bank's integrity, authenticity and national economic indicator's global acceptance. After intellectual's question on his misleading the data, the premier had then replied that the majority government led by him 'will create its own data'.
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