Sunday, July 28, 2019

Trade deficit balloons to Rs 1.32 trillion

The total trade deficit of the country jumped by 14.26 per cent to Rs 1.32 trillion in the last fiscal year 2018-19, according to the Department of Customs (DoC).
The country imported commodities worth Rs 1.42 trillion whereas its exported merchandise worth Rs 97.11 billion only widening the trade deficit gap to Rs 1.32 trillion that is equal to the budget of the same fiscal year.
Ballooning trade deficit has been raising concern about external sector stability of the country though the imports grew by 13.93 per cent in the last fiscal year compared to a fiscal year ago whereas exports grew by 19.36 per cent.
Nepal’s exports to imports ratio fell to 1:14.6 in the last fiscal year from 1:15.3 per cent a fiscal year ago. It means Nepal imported Rs 14.6 worth of goods for every rupee worth of export earnings.
Likewise, Nepal registered trade deficit with 134 countries – out of a total of 157 trading partners – whereas the country maintained positive trade balance with 23 countries only. But the trade surplus Afghanistan (Rs 14.29 million), Central African Republic (Rs 275.85 million) and Maldives (Rs 6.2 million) are negligible to the whopping imports of the country.
Nepal suffered the highest trade deficit with India at Rs 855.19 billion followed by China at Rs 203.04 billion. “Nepal exported goods and commodities worth Rs 62.73 billion to India, whereas the country imported goods and commodities worth Rs 917.92 billion with the largest trading partner,” the department data revealed, adding that trade deficit with China ballooned to Rs 203.4 billion in the last fiscal year. “Nepal exported goods worth Rs 2.1 billion to China, while it imported goods worth Rs 205.52 billion.”
Though the government has curtailed the imports of luxury goods to retain the trade deficit, the widening trade deficit has become a headache to the government. The increasing purchasing power fuelled by the remittance has enlarged the country’s import bill.

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