Thursday, June 27, 2019

Trade deficit hits at Rs 1.21 trillion

On soaring import bills, the trade deficit is going to equalise the annual budget in the current fiscal year as the trade deficit has widened by 17.40 per cent to Rs 1.21/9 trillion – surpassing the revised annual budget of Rs 1.2 trillion for the current fiscal year – in the first 11 months of the current fiscal year compared to the deficit of Rs 1.03 trillion in the same period of the last fiscal year. The trade deficit totalled Rs 1.16 trillion in the last fiscal year 2017-18.
A trade deficit is the difference between a country's export earnings and import expenses. According to the Department of Customs (DoC), Nepal’s foreign trade reached Rs 1.38 trillion – in the 11 months between mid-July and mid-June – which is an increase by 17.50 per cent compared to Rs 1.18 trillion in the same period of previous fiscal year. “The imports have a 93.7 per cent share in the total foreign trade whereas exports have only 6.3 per cent share,” the department data revealed, adding that Nepal imported goods worth Rs 1.29 trillion – some 17.45 per cent more than the imports in the 11 months of last fiscal year when it had imported Rs 1.10 trillion – whereas compared to imports, the ratio of exports is very low. “In the 11 months of the current fiscal year, Nepal’s export earnings swelled to Rs 87.83 billion as it is an increase by 18.18 per cent compared to the same period of the previous fiscal year.”
According to the department, Nepal exported merchandise worth Rs 74.32 billion in the 11 months of the last fiscal year. “The import-export ratio at the moment stands at 1:14.8, which means for every rupee of goods exported, Nepal imports goods worth Rs 14.8.”
The import-export ratio stood at 1:14.9 in the same period of last fiscal year, the department data revealed.
According to the customs statistics, Nepal enjoyed a trade surplus with only 21 countries among its 155 trading partners. However, among the 155 trading partners, the trade deficit is highest with southern and northern neighbours. Nepal faced a trade deficit worth Rs 785 billion with India in the first 11 months as it imported goods worth Rs 841 billion from India and exported only Rs 56.5 billion to the southern neighbour. Likewise, the trade deficit with China stands at Rs 184 billion as it imported goods worth Rs 186 billion from China and exported only Rs 1.96 billion worth goods to the northern neighbour in the 11 months of the current fiscal year.
Petroleum is the largest import of Nepal as usual. The country imported Rs 231.72 billion worth petro products including mineral oils, bitumen and mineral waxes. Likewise, the iron and steel import bill came to Rs 132.30 billion and Nepal paid Rs 109.87 billion on importing machinery and mechanical appliances, the department report revealed, adding that imports of vehicles and parts and electrical equipment stood at Rs 84.42 billion and Rs 81.71 billion, respectively. “Nepal imports cereals worth Rs 47.97 billion.”
Similarly, Nepal's largest exports were animal or vegetable fats and oils and related products worth Rs 10.99 billion. Export earnings from man-made fibres including acrylic yarn totalled Rs 9.03 billion, and revenues from the export of coffee, tea and spices amounted to Rs 7.61 billion. Exports of woolen carpets and flooring materials were worth Rs 7.05 billion whereas Nepal earned Rs 5.43 billion from the export of iron and steel.

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