Wednesday, December 23, 2020

Trade deficit narrows, though export receipt can pay for only 10 per cent of import bill

 Though, the trade deficit in the first five months of the current fiscal year declined by 10.91 per cent compared to the same period last year, the export receipt is enough to pay for only 10 per cent of import bill. “The country's export increased by 5.12 per cent to Rs 50.05 billion, whereas the imports declined by 9.59 per cent to Rs 525.49 billion,” according to the government data.

According to the Department of Customs (DoC), Nepal’s trade deficit came down to Rs 475.44 billion from Rs 533.64 billion – though not remarkable, and also conditional not due to government policy push – during mid-July and mid-December as a result of a fall in import and a rise in export. The fall in imports has provided some cushion to the country’s foreign currency reserve that is being spent to imports merchandise.

Despite the increase in export earnings, the government is going to miss its target of export earnings to more than Rs 100 billion by 2020.

Nepal’s 70.65 per cent of total international trade worth Rs 575.44 billion is with India, the data revealed, adding that in terms of import too, some 65.78 per cent of Nepal’s total import is with the southern neighbour. “Nepal has a trade deficit with 112 of its 136 trading partner countries across the globe, and has a favourable trade balance with the remaining 24 countries in the five months of the current fiscal year 2020-21.”

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