The trade deficit has ballooned by 17 per cent to Rs 1211. 96 billion, in the first 11 months of the last fiscal year 2018-19, which recently ended on July 16.
The merchandise exports increased by 18.7 per cent to Rs 87.83 billion in the first 11 months of fiscal 2018-19 compared to an increase of 10 per cent a year ago, according to the central bank that has reported the merchandise imports increment by 17.3 per cent to Rs 1,299.80 billion compared to an increase of 23.6 per cent in the same period of the previous year, according to the ‘Current Macroeconomic’ report of the central bank. “The trade deficit stands at around 37 per cent of the country’s gross domestic product.”
The balance of payments (BoP) deficit has also stood at Rs 90.83 billion during mid-July 2018 to mid-June 2019, the report reads revealing that the country recorded balance of payments (BoP) deficit is pushed by the current account that has also registered a deficit of Rs 248.72 billion till mid-June of fiscal 2018-19, though such deficit was Rs 210.24 billion during the same period of the previous fiscal year 2017-18. The current account involves the net value of trade in goods, trade in services, transfers and income from abroad.
Likewise, balance of payments (BoP) records a country’s financial transactions with the rest of the world under two subheadings, current account and capital account.
The BoP deficit has also put pressure on foreign exchange reserve, which has decreased to Rs 1,030.88 billion as at mid-June 2019 from Rs 1,102.59 billion as at mid-July 2018. In US dollar terms, the gross foreign exchange reserves dropped to $9.25 billion as at mid-June 2019 from $10.08 billion as at mid-July 2018, the central bank report stated, adding that the rising trade deficit has brought down the foreign currency reserves by 8.2 per cent to $9.25 billion. At this rate, Nepal has enough to cover the import of goods and services for less than eight months.
However, the remittance inflow has increased by 17.5 per cent to Rs 799.02 billion – the major source of the country’s foreign currency earnings for over two decades – in the first 11 months of 2018-19 compared to an increase of 7.3 per cent in the same period of the last fiscal year. In US dollar terms, such inflows increased by 8.1 per cent in the review period compared to 9.7 per cent in the corresponding period of the previous year.
Likewise, the country also faced net loss of Rs 10.56 billion from the service trade. The central bank’s data revealed that Nepalis going abroad spent Rs 80.45 billion while the country earned Rs 68.63 billion from tourists who visited Nepal.
Under the capital account, capital transfer – an investment in purchase of fixed assets – registered at Rs 13.88 billion, down from Rs 15.02 billion a fiscal year ago. “The amount of foreign direct investment (FDI) that the country received also went down to Rs 11.81 billion from Rs 15.88 billion.”
The merchandise exports increased by 18.7 per cent to Rs 87.83 billion in the first 11 months of fiscal 2018-19 compared to an increase of 10 per cent a year ago, according to the central bank that has reported the merchandise imports increment by 17.3 per cent to Rs 1,299.80 billion compared to an increase of 23.6 per cent in the same period of the previous year, according to the ‘Current Macroeconomic’ report of the central bank. “The trade deficit stands at around 37 per cent of the country’s gross domestic product.”
The balance of payments (BoP) deficit has also stood at Rs 90.83 billion during mid-July 2018 to mid-June 2019, the report reads revealing that the country recorded balance of payments (BoP) deficit is pushed by the current account that has also registered a deficit of Rs 248.72 billion till mid-June of fiscal 2018-19, though such deficit was Rs 210.24 billion during the same period of the previous fiscal year 2017-18. The current account involves the net value of trade in goods, trade in services, transfers and income from abroad.
Likewise, balance of payments (BoP) records a country’s financial transactions with the rest of the world under two subheadings, current account and capital account.
The BoP deficit has also put pressure on foreign exchange reserve, which has decreased to Rs 1,030.88 billion as at mid-June 2019 from Rs 1,102.59 billion as at mid-July 2018. In US dollar terms, the gross foreign exchange reserves dropped to $9.25 billion as at mid-June 2019 from $10.08 billion as at mid-July 2018, the central bank report stated, adding that the rising trade deficit has brought down the foreign currency reserves by 8.2 per cent to $9.25 billion. At this rate, Nepal has enough to cover the import of goods and services for less than eight months.
However, the remittance inflow has increased by 17.5 per cent to Rs 799.02 billion – the major source of the country’s foreign currency earnings for over two decades – in the first 11 months of 2018-19 compared to an increase of 7.3 per cent in the same period of the last fiscal year. In US dollar terms, such inflows increased by 8.1 per cent in the review period compared to 9.7 per cent in the corresponding period of the previous year.
Likewise, the country also faced net loss of Rs 10.56 billion from the service trade. The central bank’s data revealed that Nepalis going abroad spent Rs 80.45 billion while the country earned Rs 68.63 billion from tourists who visited Nepal.
Under the capital account, capital transfer – an investment in purchase of fixed assets – registered at Rs 13.88 billion, down from Rs 15.02 billion a fiscal year ago. “The amount of foreign direct investment (FDI) that the country received also went down to Rs 11.81 billion from Rs 15.88 billion.”
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