The overall Balance of Payment (BoP) recorded a deficit of Rs 14.79 billion -- in the nine months of the current fiscal year -- some Rs 3.49 billion more from Rs 11.30 billion in the eight months, according to the central bank.
"But the BoP was deficit at Rs 17.99 billion in the same period last fiscal year," stated the current macroeconomic situation based on the nine months of the current fiscal year that has attributed to the current account and service account deficit.
The current account registered a deficit of Rs 14.99 billion compared to a deficit of Rs 28.56 billion in the same period last year. But due to growth of trade deficit along with improvement in the service account attributed to a decline in the current account deficit, though the BoP position has not improved.
Similarly, the Free On Board (FOB)-based merchandise trade deficit increased by 2.1 per cent to Rs 231.85 billion aganist a growth of by 58.1 per cent in the same period last year. However, the service account deficit declined significantly by 33.1 per cent to Rs 8.22 billion compared to an increase by 36.5 per cent to Rs 12.30 billion in the same period last year, the report said.
The net transfer account registered a growth of 8.4 per cent to Rs 221.21 billion compared to that of a year ago. Under the transfers sub-group, grants decreased by 13.4 per cent to Rs 17.95 billion, while pension receipts rose by 6.7 per cent to Rs 21.63 billion. "Likewise, workers' remittances increased by 10.3 per cent to Rs 181.84 billion compared to its growth of 9.6 per cent in the same period last year.
Likewise, under the financial account foreign direct investment of Rs 5.60 billion was recorded compared to Rs 1.71 billion in the same period last year.
Total trade deficit increased by 2.2 per cent to Rs 240.08 billion against an increase of 56.5 per cent in the same period last year. Trade deficit with India rose by 28.5 per cent compared to a growth of 53.1 per cent in the same period last year, whereas trade deficit with other countries declined by 28.6 per cent compared to a growth of 60.6 per cent in the same period a year ago. "The improvement in exports coupled with deceleration in import contributed to an increase in the ratio of export to import to 16.7 per cent from the ratio of 16.2 per cent a year ago," it added.
According to the report, merchandise exports increased by 5.7 per cent to Rs 47.98 billion compared to a decline by 10.9 per cent to Rs 45.39 billion in the same period last year, whereas on a monthly basis, exports increased by 4.4 per cent in March-April against a month ago.
"Exports to India increased by 8.1 per cent in contrast to a drop of 7.1 per cent in the same period last year but exports to other countries increased by a nominal 1.2 per cent against to a plunge of 17.3 per cent in the same period last year," it said, attributing the increase in the exports to India mainly to the increase in exports of zinc sheet, jute goods, thread, plastic utensils and juice.
Similarly, merchandise imports also increased by 2.8 per cent to Rs 288.06 billion against a growth of 39.4 per cent to Rs 280.26 billion in the same period last year. "Imports from India grew by 24.6 per cent compared to a growth of 36.5 per cent in the same period last year, whereas imports from other countries declined by 24.8 per cent in contrast to a growth of 43.2 per cent in the same period last year," the central bank stated.
The import of petroleum product, MS billet, cold rolled sheet in coil, chemical fertiliser and other machinery and parts increased from India whereas import of gold, readymade garments, steel rod and sheet, other machinery and parts and betelnuts declined from other countries.
Inflation at 10.6pc
KATHMANDU: The y-o-y inflation as measured by the consumer price index (2005/06=100) increased to 10.6 per cent in mid-April from 14.3 per cent in the same period last fiscal year. The index of food and beverage group increased by 17.3 per cent and the index of non-food and services group increased by 5.2 per cent against 16.1 per cent and 6.3 per cent increase in the same period last fiscal year.
Showing posts with label Balance of payment. Show all posts
Showing posts with label Balance of payment. Show all posts
Monday, May 30, 2011
Thursday, December 10, 2009
Government fails to boost exports, forex reserve drops
Trade deficit widens,
Balance of Payment deficit
Current account deficit
Remittance soar by only 11.1 per cent
The third month of the current fiscal year saw poor export business as the exports fell by 16.8 per cent against an increase of 25.9 per cent in the same period of last year, according to the caurrent macroeconomic situation, based on the first three month's data of the current fiscal year.
Of the total exports, export to India declined by 11.4 per cent against a rise of 3.2 per cent in the same period last fiscal year. Exports to other countries also plummeted by 23.2 per cent as against a rise of 70.6 per cent in the same period of the previous year.
The report attributes the decline in the exports to India to the decline in the exports of readymade garments, zinc sheet, shoes and sandals, thread and marble slab, among others. “Similarly, exports to other countries went down due to the decline in the export of pulses, woolen carpets, readymade garments, tanned skin and readymade leather goods,” the NRN said.
However, imports increased by 30.4 per cent compared with a growth of 32.8 per cent in the corresponding period of the last year. “While imports from India rose by 25.2 per cent compared with a growth of 20.9 per cent, imports from other countries soared by 37 per cent compared to a sharp growth of 51.8 per cent in the same period oi last fiscal year.
Similarly, the overall balance of Payment (BoP) registered a deficit of Rs 19.45 billion in contrast to a surplus of Rs 7.70 billion in the same period of the previous year. “The current account also posted a deficit of Rs 11.38 billion in the first quarter of this fiscal year against a surplus of Rs 4.31 billion in the same period of the last year,” the central bank said in the report. The current account deficit is attributed to the expansion in trade deficit by about 48 per cent and the decline in net income by 15.6 per cent.
Likewise, under transfers, while grants fell by 21 per cent , workers' remittances increased by just 11.1 per cent in comparison to a whopping rise of 67.3 per cent in the same period of the last year.
The gross foreign exchange reserves stood at Rs 249.10 billion in mid-October 2009, a drop by 11 per cent compared to the level as at mid-July 2009. Such reserves rose by 8.5 per cent in the corresponding period of the last year.
“In US dollar term, gross foreign exchange reserves declined by 5.7 per cent to $ 3.38 billion in mid-October 2009. In the same period last year, such reserves had gone down by 3.9 per cent. The current level of reserves is sufficient for financing merchandise imports of 8.5 months and merchandise and service imports of 7.2 months only,” the report said.
However, the budget deficit stood at Rs 90.5 million compared with a deficit of Rs 2.9 billion in the same period last year due to a high growth of revenue collection.
But the total government spending increased by whopping 35.5 per cent to Rs 39.7 billion against a decrease of 2.4 per cent in the same period last year. “Recurrent expenditure increased by 54 per cent to Rs 28.5 billion against decreased by 13.2 per cent in the same quarter last year. However, capital expenditure increased by 73.3 per cent to Rs 1.93 billion in contrast to a decline of 60.8 per cent in the same period last year.
Balance of Payment deficit
Current account deficit
Remittance soar by only 11.1 per cent
The third month of the current fiscal year saw poor export business as the exports fell by 16.8 per cent against an increase of 25.9 per cent in the same period of last year, according to the caurrent macroeconomic situation, based on the first three month's data of the current fiscal year.
Of the total exports, export to India declined by 11.4 per cent against a rise of 3.2 per cent in the same period last fiscal year. Exports to other countries also plummeted by 23.2 per cent as against a rise of 70.6 per cent in the same period of the previous year.
The report attributes the decline in the exports to India to the decline in the exports of readymade garments, zinc sheet, shoes and sandals, thread and marble slab, among others. “Similarly, exports to other countries went down due to the decline in the export of pulses, woolen carpets, readymade garments, tanned skin and readymade leather goods,” the NRN said.
However, imports increased by 30.4 per cent compared with a growth of 32.8 per cent in the corresponding period of the last year. “While imports from India rose by 25.2 per cent compared with a growth of 20.9 per cent, imports from other countries soared by 37 per cent compared to a sharp growth of 51.8 per cent in the same period oi last fiscal year.
Similarly, the overall balance of Payment (BoP) registered a deficit of Rs 19.45 billion in contrast to a surplus of Rs 7.70 billion in the same period of the previous year. “The current account also posted a deficit of Rs 11.38 billion in the first quarter of this fiscal year against a surplus of Rs 4.31 billion in the same period of the last year,” the central bank said in the report. The current account deficit is attributed to the expansion in trade deficit by about 48 per cent and the decline in net income by 15.6 per cent.
Likewise, under transfers, while grants fell by 21 per cent , workers' remittances increased by just 11.1 per cent in comparison to a whopping rise of 67.3 per cent in the same period of the last year.
The gross foreign exchange reserves stood at Rs 249.10 billion in mid-October 2009, a drop by 11 per cent compared to the level as at mid-July 2009. Such reserves rose by 8.5 per cent in the corresponding period of the last year.
“In US dollar term, gross foreign exchange reserves declined by 5.7 per cent to $ 3.38 billion in mid-October 2009. In the same period last year, such reserves had gone down by 3.9 per cent. The current level of reserves is sufficient for financing merchandise imports of 8.5 months and merchandise and service imports of 7.2 months only,” the report said.
However, the budget deficit stood at Rs 90.5 million compared with a deficit of Rs 2.9 billion in the same period last year due to a high growth of revenue collection.
But the total government spending increased by whopping 35.5 per cent to Rs 39.7 billion against a decrease of 2.4 per cent in the same period last year. “Recurrent expenditure increased by 54 per cent to Rs 28.5 billion against decreased by 13.2 per cent in the same quarter last year. However, capital expenditure increased by 73.3 per cent to Rs 1.93 billion in contrast to a decline of 60.8 per cent in the same period last year.
Wednesday, November 18, 2009
MAURITIUS BUDGET 2010: FM Sithanen plays Santa
PORT LOUIS: Finance minister Ramakrishna Sithanen today presented his fifth budget keeping the common man in mind. Nearing election year, Sithanen’s presentation is not likely to raise eyebrows.
The budget for the year 2010 – made to coincide with the calendar year for the first time – has its focus on accelerating the private sector investment, mitigating the economic crisis and creating more jobs, ensuring social security including low cost housing, water supply and sewage – and sustainable development while stressing on Greener Mauritius. The budget also promises to promote culture and sports too.
“The Balance of Payments (BoP) has turned around from a deficit of 4.9 billion in 2005 amounting to 2.6 per cent of GDP to a surplus as from 2007,” Brunel University doctorate finance minister said adding that “despite the crisis the surplus is projected to be around Rs 13.5 billion ($452 million) for 2009, representing about 4.8 per cent of gross domestic product (GDP).”
He has, however, projected a fiscal deficit at 4.5 per cent. But the government borrowing requirement will only be four per cent of the GDP, because it is going to raise Rs 1.5 million from the listing of Mauritius Telecom (MT).
Painting a rosy picture of the island nation’s economy – in his over two-hour long budget speech in the parliament house – he hailed the role of Small and Midium Entreprises (SMEs) as according to him, in the past four years, these enterprises have generated 24,000 new jobs, accounting for 60 per cent of the total 40,000 jobs created. “In 2008, the economy has created more jobs for women than men,” he said.
The good news for the business community is that he has kept the tax rates unchanged. However, the budget has targeted to raise Rs 66.8 billion in revenue that is up by 21.9 per cent than the last year.
Due to its traditional mono-crop economy, the budget has a various packages for the sugar industry sector.
He has continued the Additional Stimulus Package (ASP) until December 2010 to mitigate the crisis because of the positive outcome from ASP during the year. The budget vows to provide support of Rs 900 million to local authorities compared to some Rs 45 million they used to receive annually and maintain the additional Rs 100 million for infrastructure
development in Rodrigues.
Though, he is worried about the very high budget deficit. The expansionary macroeconomic policies -- in particular stimulus Measures -- have triggered a rise in household consumption as a percentage of GDP to 75.2 per cent in 2009 from 74.3 per cent in 2008. As a result the saving rate is expected to fall to 12.8 per cent in 2009.But according to the finance minister, the Indian Ocean Island nation has survived the crisis. He attributed the survival of the economy despite the global crisis, to reforms.The Central Statistics Office (CSO) has predicted a growth rate of 2.8 per cent for 2009 and 4.3 per cent for 2010. By 2011, he said, the economy will rebound and be on track for five per cent and above.
FDI
FDI averaged around Rs 1 billion annually for the two decades ending 2005. We have taken this yearly average to around Rs 8.4 billion since 2005. Following the reforms in 2006, we have attracted more than Rs 30 billion of FDI. This year, in the midst of the crisis, we are expecting around Rs 9 billion of FDI. The FDI is also more diversified than in the past, coming from various countries and flowing into almost all sectors of the economy. Two months ago the Jin Fei project was inaugurated. It is the single largest FDI in our history, for an investment of Rs 25 billion over eight years, creating some 40,000 jobs, both direct and indirect.
National Savings
National saving rate in Mauritius has been historically high, staying above 20 per cent for most of the years since independence. However, as from 2001 it has been on a decline. The situation could have tightened the capacity to finance investments. But it has not. During the period 2006 to 2009, average monthly rupee deposits at banks have grown by around 40 per cent, outpacing GDP growth and generating enough liquidity to meet investment needs. In fact, all types of deposits, including savings, time and foreign currency have been rising at rates exceeding GDP growth. The savings-investment gap is also reflected in the current account of the Balance of Payments (BoP). The Net International Reserves have gone up from Rs 56.3 billion in 2005 to around Rs 100 billion – an 80 per cent increase. Our country has enough foreign currency reserves to pay for 42.8 weeks of imports compared to 31.4 weeks in July 2005.
Current Account
The current account deficit is expected to be lower at around nine per cent of GDP. The BoP has turned around from a deficit of Rs 4.9 billion in 2005, amounting to 2.6 per cent of GDP to a surplus as from 2007. Despite the crisis, the surplus is projected to be around Rs 13.5 billion for 2009, representing 4.8 per cent of GDP.
Agro-Industry
One of the traditional pillars of the country’s economy – the sugarcane Industry – has bounced back and expanded by around 22 per cent, including an 18.2 per cent growth in 2009. “The government’s vision of food security has been fruitful as the stage has been set for the production of 10 million litres of milk per year as from 2010 and 12 million litres by 2011. The Food Security Fund is also financing the purchase of fibre glass boats for off lagoon fishers. The Fishermen Investment Trust is funding activities that were previously inaccessible for artisanal fishermen, including fish farming in cages, integrated fish culture projects in barachois and purchase of boats for off lagoon fishing in Mauritius and in Rodrigues. The Marine and Agricultural Resource Support (MARS) programme is implementing pro-poor reforms and institutional development, marine resource management, and diversification of rural incomes and employment in Mauritius and Rodrigues.
Textile
The textiles and clothing sector was recovering from its deep recession, expanding its output by up to 8.5 per cent in 2007. But it was caught in the
global crisis, stagnating in 2008 and its output shrinking by four per cent in 2009.
Tourism
The tourism sector has been booming before the global crisis hit the island nation. It expanded by an annual average rate of 7.8 per cent from 2006 to 2008 with a peak of 15.2 per cent in 2007. But this year, it has been hit by the crisis, showing a negative 7.6 per cent growth.
Financial sector
The financial industry has come out relatively unscathed from the global financial turmoil. It will grow by some six per cent this year. The sector is showing an annual average growth rate of around 7.6 per cent for the period 2006 to 2009.
ICT/BPO
The ICT/BPO sector has grown by 40.8 per cent in the past three years and is expanding by 16.2 per cent this year. It is now contributing 5.8 per cent to GDP from less than one percent in 2005 and is employing 12,000 persons.
Construction
The construction industry has been experiencing its best period in many years. Its growth averaged 10.5 per cent annually for the period 2006 to 2008. This year the slowdown in real estate and IRS and RES activities have affected its output, while public investment in infrastructure has enabled it to maintain a positive growth of 2.5 per cent. The real estate sector is maintaining a healthy growth pace, averaging seven per cent for the period 2006 to 2009 and expanding by about six per cent in 2009.
Health care
The health centre of excellence has become a reality - providing world class services to Mauritians as well as to foreign clients. The number of beds in private clinics has increased by 56 per cent since 2005 to more than 800. There are now 19 private clinics in Mauritius in contrast to 12 in 2005.
Infrastructure development
The budget continuing its focuses on infrastructure development – including eco friendly infrastructure – has promised to modernise and expand import.
“Over Rs 15 billion have been allocated to extend, improve and create new road networks. Out of which Rs 1.3 billion to maintain and rehabilitate round 600-km of roads. The construction of the additional carriages and road ways will add 360 km of roads to the network,” he said.
He has also allocated budget for the Port. The Mauritius Container Terminal berth is being strengthened and expanded and the seabed is being deepened to 16.5-m at a cost of Rs 3.5 billion to allow the Port to meet growing traffic and attract larger vessels,
Agriculture
To enable planters and breeders to optimise their revenue, AREU is setting up an agricultural production and marketing information system. It will provide planters with real time market intelligence on crop production and prices by using mobile phone technology and posting information on a central website. Relevant information for breeders will also be supplied. To encourage the development of high-tech sheltered farming the government is introducing a scheme to provide technical assistance for the design and implementation of projects. It will also advance 90 per cent of the investment costs on soft terms, with a moratorium on payments for three years. It is setting up a scheme to assist sugar co-operatives to obtain the Fair Trade accreditation from the EU. This will enable them to obtain a premium of $60 per tonne of sugar. Government will advance the funds on soft terms for 75 per cent of the costs of consultancy and the application fee of Rs 150,000. Government has instead decided to set up a Cane Democratisation Fund to hold the 35 per cent stake in the various companies. The shares currently held by the Sugar Investment Trust in milling companies will be transferred to the Cane Democratisation Fund. In return, the shareholders of SIT will own shares of corresponding value in the Cane Democratisation Fund. Shares in the Cane Democratisation Fund will be offered to planters, labourers and artisans.
Bounty for the employees
Upto Rs 12,000 monthly salary holders – 3.5 per cent increment
Above the Rs 12,000 – Rs 450
The budget for the year 2010 – made to coincide with the calendar year for the first time – has its focus on accelerating the private sector investment, mitigating the economic crisis and creating more jobs, ensuring social security including low cost housing, water supply and sewage – and sustainable development while stressing on Greener Mauritius. The budget also promises to promote culture and sports too.
“The Balance of Payments (BoP) has turned around from a deficit of 4.9 billion in 2005 amounting to 2.6 per cent of GDP to a surplus as from 2007,” Brunel University doctorate finance minister said adding that “despite the crisis the surplus is projected to be around Rs 13.5 billion ($452 million) for 2009, representing about 4.8 per cent of gross domestic product (GDP).”
He has, however, projected a fiscal deficit at 4.5 per cent. But the government borrowing requirement will only be four per cent of the GDP, because it is going to raise Rs 1.5 million from the listing of Mauritius Telecom (MT).
Painting a rosy picture of the island nation’s economy – in his over two-hour long budget speech in the parliament house – he hailed the role of Small and Midium Entreprises (SMEs) as according to him, in the past four years, these enterprises have generated 24,000 new jobs, accounting for 60 per cent of the total 40,000 jobs created. “In 2008, the economy has created more jobs for women than men,” he said.
The good news for the business community is that he has kept the tax rates unchanged. However, the budget has targeted to raise Rs 66.8 billion in revenue that is up by 21.9 per cent than the last year.
Due to its traditional mono-crop economy, the budget has a various packages for the sugar industry sector.
He has continued the Additional Stimulus Package (ASP) until December 2010 to mitigate the crisis because of the positive outcome from ASP during the year. The budget vows to provide support of Rs 900 million to local authorities compared to some Rs 45 million they used to receive annually and maintain the additional Rs 100 million for infrastructure
development in Rodrigues.
Though, he is worried about the very high budget deficit. The expansionary macroeconomic policies -- in particular stimulus Measures -- have triggered a rise in household consumption as a percentage of GDP to 75.2 per cent in 2009 from 74.3 per cent in 2008. As a result the saving rate is expected to fall to 12.8 per cent in 2009.But according to the finance minister, the Indian Ocean Island nation has survived the crisis. He attributed the survival of the economy despite the global crisis, to reforms.The Central Statistics Office (CSO) has predicted a growth rate of 2.8 per cent for 2009 and 4.3 per cent for 2010. By 2011, he said, the economy will rebound and be on track for five per cent and above.
FDI
FDI averaged around Rs 1 billion annually for the two decades ending 2005. We have taken this yearly average to around Rs 8.4 billion since 2005. Following the reforms in 2006, we have attracted more than Rs 30 billion of FDI. This year, in the midst of the crisis, we are expecting around Rs 9 billion of FDI. The FDI is also more diversified than in the past, coming from various countries and flowing into almost all sectors of the economy. Two months ago the Jin Fei project was inaugurated. It is the single largest FDI in our history, for an investment of Rs 25 billion over eight years, creating some 40,000 jobs, both direct and indirect.
National Savings
National saving rate in Mauritius has been historically high, staying above 20 per cent for most of the years since independence. However, as from 2001 it has been on a decline. The situation could have tightened the capacity to finance investments. But it has not. During the period 2006 to 2009, average monthly rupee deposits at banks have grown by around 40 per cent, outpacing GDP growth and generating enough liquidity to meet investment needs. In fact, all types of deposits, including savings, time and foreign currency have been rising at rates exceeding GDP growth. The savings-investment gap is also reflected in the current account of the Balance of Payments (BoP). The Net International Reserves have gone up from Rs 56.3 billion in 2005 to around Rs 100 billion – an 80 per cent increase. Our country has enough foreign currency reserves to pay for 42.8 weeks of imports compared to 31.4 weeks in July 2005.
Current Account
The current account deficit is expected to be lower at around nine per cent of GDP. The BoP has turned around from a deficit of Rs 4.9 billion in 2005, amounting to 2.6 per cent of GDP to a surplus as from 2007. Despite the crisis, the surplus is projected to be around Rs 13.5 billion for 2009, representing 4.8 per cent of GDP.
Agro-Industry
One of the traditional pillars of the country’s economy – the sugarcane Industry – has bounced back and expanded by around 22 per cent, including an 18.2 per cent growth in 2009. “The government’s vision of food security has been fruitful as the stage has been set for the production of 10 million litres of milk per year as from 2010 and 12 million litres by 2011. The Food Security Fund is also financing the purchase of fibre glass boats for off lagoon fishers. The Fishermen Investment Trust is funding activities that were previously inaccessible for artisanal fishermen, including fish farming in cages, integrated fish culture projects in barachois and purchase of boats for off lagoon fishing in Mauritius and in Rodrigues. The Marine and Agricultural Resource Support (MARS) programme is implementing pro-poor reforms and institutional development, marine resource management, and diversification of rural incomes and employment in Mauritius and Rodrigues.
Textile
The textiles and clothing sector was recovering from its deep recession, expanding its output by up to 8.5 per cent in 2007. But it was caught in the
global crisis, stagnating in 2008 and its output shrinking by four per cent in 2009.
Tourism
The tourism sector has been booming before the global crisis hit the island nation. It expanded by an annual average rate of 7.8 per cent from 2006 to 2008 with a peak of 15.2 per cent in 2007. But this year, it has been hit by the crisis, showing a negative 7.6 per cent growth.
Financial sector
The financial industry has come out relatively unscathed from the global financial turmoil. It will grow by some six per cent this year. The sector is showing an annual average growth rate of around 7.6 per cent for the period 2006 to 2009.
ICT/BPO
The ICT/BPO sector has grown by 40.8 per cent in the past three years and is expanding by 16.2 per cent this year. It is now contributing 5.8 per cent to GDP from less than one percent in 2005 and is employing 12,000 persons.
Construction
The construction industry has been experiencing its best period in many years. Its growth averaged 10.5 per cent annually for the period 2006 to 2008. This year the slowdown in real estate and IRS and RES activities have affected its output, while public investment in infrastructure has enabled it to maintain a positive growth of 2.5 per cent. The real estate sector is maintaining a healthy growth pace, averaging seven per cent for the period 2006 to 2009 and expanding by about six per cent in 2009.
Health care
The health centre of excellence has become a reality - providing world class services to Mauritians as well as to foreign clients. The number of beds in private clinics has increased by 56 per cent since 2005 to more than 800. There are now 19 private clinics in Mauritius in contrast to 12 in 2005.
Infrastructure development
The budget continuing its focuses on infrastructure development – including eco friendly infrastructure – has promised to modernise and expand import.
“Over Rs 15 billion have been allocated to extend, improve and create new road networks. Out of which Rs 1.3 billion to maintain and rehabilitate round 600-km of roads. The construction of the additional carriages and road ways will add 360 km of roads to the network,” he said.
He has also allocated budget for the Port. The Mauritius Container Terminal berth is being strengthened and expanded and the seabed is being deepened to 16.5-m at a cost of Rs 3.5 billion to allow the Port to meet growing traffic and attract larger vessels,
Agriculture
To enable planters and breeders to optimise their revenue, AREU is setting up an agricultural production and marketing information system. It will provide planters with real time market intelligence on crop production and prices by using mobile phone technology and posting information on a central website. Relevant information for breeders will also be supplied. To encourage the development of high-tech sheltered farming the government is introducing a scheme to provide technical assistance for the design and implementation of projects. It will also advance 90 per cent of the investment costs on soft terms, with a moratorium on payments for three years. It is setting up a scheme to assist sugar co-operatives to obtain the Fair Trade accreditation from the EU. This will enable them to obtain a premium of $60 per tonne of sugar. Government will advance the funds on soft terms for 75 per cent of the costs of consultancy and the application fee of Rs 150,000. Government has instead decided to set up a Cane Democratisation Fund to hold the 35 per cent stake in the various companies. The shares currently held by the Sugar Investment Trust in milling companies will be transferred to the Cane Democratisation Fund. In return, the shareholders of SIT will own shares of corresponding value in the Cane Democratisation Fund. Shares in the Cane Democratisation Fund will be offered to planters, labourers and artisans.
Bounty for the employees
Upto Rs 12,000 monthly salary holders – 3.5 per cent increment
Above the Rs 12,000 – Rs 450
Thursday, November 12, 2009
Government's failure inspending on development works leaves whopping Budget surplus
In the first two months of the current fiscal year 2009-10, government budget surplus stood at Rs 556.6 million in comparison to a surplus of Rs 3.4 billion in the same period last year, however the government spending has gone up by 69.8 per cent to Rs 26.6 billion in comparison to an increase of 40.4 per cent
“The increase was mainly on account of a rise in the growth of recurrent expenditure,” said the current macroeconomic situation based on the first two month's data of the current fiscal year published by the central bank.“Recurrent expenditure rose by a whopping rate of 108.1 per cent to Rs 17.6 billion, compared to a moderate rise of 11.9 per cent to Rs 8.4 billion in the same period last year,” the report said attributing the rise mainly to an upward revision in the salary and allowances of the civil servants and teachers.
Meanwhile, revenue mobilisation also grew by 54.5 per cent to Rs 22.6 billion compared to an increase of 17.5 per cent in the corresponding period of the previous year. Government's firm commitment to control the leakage in the revenue as well as tax administration reforms in conjunction with increasing import and consumption by virtue of high remittances inflow contributed to such an increase in the revenue mobilisation, said the report.
The government received foreign cash loans amounting to Rs 158.9 million and foreign cash grants amounting to Rs 2.72 billion, where as it had received foreign cash loans of Rs 625.1 million and foreign cash grants of Rs 2.12 billion in the same period of last fiscal year.However, exports fell by 15.2 per cent in contrast to a rise of 35.7 per cent in the same period last year. “Of the total exports, export to India declined by 13.2 per cent in contrast to a rise of 6.7 per cent. Exports to other countries plummeted by 17.4 per cent as against a rise of 94.7 percent in the same period of last fiscal year,” the Nepal Rastra Bank said.
The decline in the exports to India was attributed to the decline in the exports of readymade garments, zinc sheet, thread, copper wire rod and aluminum section, among others. Similarly, exports to other countries went down due to the decline in the export of woolen carpets, readymade garments, pulses, tanned skin and silverware and jewelleries.At the same time, total imports expanded by 20.3 per cent compared to a higher growth of 45.5 per cent in the corresponding period of the previous year. While imports from India rose by 17.3 per cent in the review period compared to a growth of 35.4 per cent, imports from other countries soared by 24.2 per cent in the review period compared to a significant growth of 60.7 per cent during the same period last year.
The Balance of Payment (BoP) deficit has also doubled to Rs 3.76 billion against the deficit of Rs 1.89 billion in the same period of the previous year. “The current account also posted a deficit of Rs 5.07 billion compared to a deficit of Rs 2.57 billion in the same periodlast year,” the report said.
Nepal received Rs 34.99 billion remittance
KATHMANDU: Nepal received Rs 34.99 billion in the first two months of the current fiscal year. “Under transfers, workers' remittances increased by 19.7 per cent in comparison to the growth of 59.4 per cent in the same period last fiscal year,” said the central bank report.
“The increase was mainly on account of a rise in the growth of recurrent expenditure,” said the current macroeconomic situation based on the first two month's data of the current fiscal year published by the central bank.“Recurrent expenditure rose by a whopping rate of 108.1 per cent to Rs 17.6 billion, compared to a moderate rise of 11.9 per cent to Rs 8.4 billion in the same period last year,” the report said attributing the rise mainly to an upward revision in the salary and allowances of the civil servants and teachers.
Meanwhile, revenue mobilisation also grew by 54.5 per cent to Rs 22.6 billion compared to an increase of 17.5 per cent in the corresponding period of the previous year. Government's firm commitment to control the leakage in the revenue as well as tax administration reforms in conjunction with increasing import and consumption by virtue of high remittances inflow contributed to such an increase in the revenue mobilisation, said the report.
The government received foreign cash loans amounting to Rs 158.9 million and foreign cash grants amounting to Rs 2.72 billion, where as it had received foreign cash loans of Rs 625.1 million and foreign cash grants of Rs 2.12 billion in the same period of last fiscal year.However, exports fell by 15.2 per cent in contrast to a rise of 35.7 per cent in the same period last year. “Of the total exports, export to India declined by 13.2 per cent in contrast to a rise of 6.7 per cent. Exports to other countries plummeted by 17.4 per cent as against a rise of 94.7 percent in the same period of last fiscal year,” the Nepal Rastra Bank said.
The decline in the exports to India was attributed to the decline in the exports of readymade garments, zinc sheet, thread, copper wire rod and aluminum section, among others. Similarly, exports to other countries went down due to the decline in the export of woolen carpets, readymade garments, pulses, tanned skin and silverware and jewelleries.At the same time, total imports expanded by 20.3 per cent compared to a higher growth of 45.5 per cent in the corresponding period of the previous year. While imports from India rose by 17.3 per cent in the review period compared to a growth of 35.4 per cent, imports from other countries soared by 24.2 per cent in the review period compared to a significant growth of 60.7 per cent during the same period last year.
The Balance of Payment (BoP) deficit has also doubled to Rs 3.76 billion against the deficit of Rs 1.89 billion in the same period of the previous year. “The current account also posted a deficit of Rs 5.07 billion compared to a deficit of Rs 2.57 billion in the same periodlast year,” the report said.
Nepal received Rs 34.99 billion remittance
KATHMANDU: Nepal received Rs 34.99 billion in the first two months of the current fiscal year. “Under transfers, workers' remittances increased by 19.7 per cent in comparison to the growth of 59.4 per cent in the same period last fiscal year,” said the central bank report.
Friday, July 3, 2009
Government fails to control price hike
The government has completely failed to control the price hike in food commodities and the overall price hike that still hovers close to 13 per cent.
"The year-on-year (y-o-y) consumer price index rose to 12.9 per cent in mid-May 2009 compared to 9.2 per cent in the same period last year," according to the current macroeconomic situation based on the first 10 months' data of current fiscal year published by Nepal Rastra bank (NRB).
The inflation, in the review period, was driven mainly by 16.5 per cent price rise in food and beverages group. However, the price index of non-food and service group also increased by 8.8 per cent.
"In food and beverage group, sugar and sugar-related products played a key role in pushing the price hike up so that it increased by a whopping 66.9 per cent, the report said. This is in sharp contrast to last year's decline of 0.5 per cent. Similarly, the price indices of vegetables and fruits as well as meat, fish and eggs sub-groups increased by 33.5 per cent and 27.5 per cent respectively in the review period compared to an increase of 1.8 per cent and 10.2 per cent respectively in the same period last year.
The wholesale price inflation increased to 15.5 per cent compared to 10.1 per cent a year ago. Indian price hike plays a key role in the Nepali market. Though India's wholesale price index has posted a negative growth by the end of May, the Indian month-on-month price hike in May is also at 10.3 per cent.
The central bank's report reveals that the government budget on cash basis remained at a surplus of Rs 6 billion in contrast to a deficit of Rs 6 billion in the same period last year. "The government has significant cash surplus of Rs 21.6 billion -- including Rs 3.9 billion of previous year -- with Nepal Rastra Bank," according to the report, thought the total government expenditure on cash flow basis, increased by 25.7 per cent to Rs 127.6 billion compared to an increase of 28.2 per cent in the corresponding period of the previous year. Low growth rate of capital expenditure accounted for such a deceleration of total government expenditure.
Revenue mobilisation also grew by 39.9 per cent to Rs 110.5 billion compared to an increase of 24 per cent in the corresponding period the previous year. "The government's firm commitment to revenue leakage control, revenue administration reforms, Voluntary Disclosure of Income Scheme and significant growth of non-tax revenue contributed to such an impressive growth of revenue mobilisation in the review period," said NRB.
However, exports shot up by 19.8 per cent in the first ten months of the current fiscal year in contrast to a decline by 2.4 per cent in the same period last year. The rise in exports is contributed to readymade garments, textiles, GI pipe, catechu, toothpaste, pulses followed by pashmina, woollen carpets, readymade garments and handicraft.
But at the same time, total imports also went up by 25.4 per cent compared to an increase of 16.8 per cent in the same period last year. "Imports from India rose by 11.5 per cent and imports from other countries surged by 50.4 per cent compared to last year's nominal imports," the report said.
During the review period, the overall Balance of Payment (BoP) posted a significant surplus of Rs 43.1 billion compared to a lower surplus of Rs 19.9 billion in the same period last year.
"The year-on-year (y-o-y) consumer price index rose to 12.9 per cent in mid-May 2009 compared to 9.2 per cent in the same period last year," according to the current macroeconomic situation based on the first 10 months' data of current fiscal year published by Nepal Rastra bank (NRB).
The inflation, in the review period, was driven mainly by 16.5 per cent price rise in food and beverages group. However, the price index of non-food and service group also increased by 8.8 per cent.
"In food and beverage group, sugar and sugar-related products played a key role in pushing the price hike up so that it increased by a whopping 66.9 per cent, the report said. This is in sharp contrast to last year's decline of 0.5 per cent. Similarly, the price indices of vegetables and fruits as well as meat, fish and eggs sub-groups increased by 33.5 per cent and 27.5 per cent respectively in the review period compared to an increase of 1.8 per cent and 10.2 per cent respectively in the same period last year.
The wholesale price inflation increased to 15.5 per cent compared to 10.1 per cent a year ago. Indian price hike plays a key role in the Nepali market. Though India's wholesale price index has posted a negative growth by the end of May, the Indian month-on-month price hike in May is also at 10.3 per cent.
The central bank's report reveals that the government budget on cash basis remained at a surplus of Rs 6 billion in contrast to a deficit of Rs 6 billion in the same period last year. "The government has significant cash surplus of Rs 21.6 billion -- including Rs 3.9 billion of previous year -- with Nepal Rastra Bank," according to the report, thought the total government expenditure on cash flow basis, increased by 25.7 per cent to Rs 127.6 billion compared to an increase of 28.2 per cent in the corresponding period of the previous year. Low growth rate of capital expenditure accounted for such a deceleration of total government expenditure.
Revenue mobilisation also grew by 39.9 per cent to Rs 110.5 billion compared to an increase of 24 per cent in the corresponding period the previous year. "The government's firm commitment to revenue leakage control, revenue administration reforms, Voluntary Disclosure of Income Scheme and significant growth of non-tax revenue contributed to such an impressive growth of revenue mobilisation in the review period," said NRB.
However, exports shot up by 19.8 per cent in the first ten months of the current fiscal year in contrast to a decline by 2.4 per cent in the same period last year. The rise in exports is contributed to readymade garments, textiles, GI pipe, catechu, toothpaste, pulses followed by pashmina, woollen carpets, readymade garments and handicraft.
But at the same time, total imports also went up by 25.4 per cent compared to an increase of 16.8 per cent in the same period last year. "Imports from India rose by 11.5 per cent and imports from other countries surged by 50.4 per cent compared to last year's nominal imports," the report said.
During the review period, the overall Balance of Payment (BoP) posted a significant surplus of Rs 43.1 billion compared to a lower surplus of Rs 19.9 billion in the same period last year.
Tuesday, July 31, 2007
Major highlights of Monetary Policy 2007-08
- The monetary policy for the fiscal year 2007-08 that Nepal Rastra Bank (NRB) made public on 23 July has no remarkable policy changes.
- It focuses mainly on managing high liquidity and maintaining fiscal stability, vowed to limit the inflation rate at 5.5 per cent and achieve surplus balance of payment of at least eight billion rupees.
- In order to bolster institutional investments to the disadvantageous sectors, the policy has raised single borrower limit for microfinance institutions to Rs 60,000 for individuals and Rs 150,000 for micro enterprises.
- Microfinance institutions that raise their paid-up capital by Rs 2.5 million, will be allowed to extend services to one adjoined district, the policy stated.
- Now onwards commercial banks are required to extend three per cent of their total loan investments for deprived sector. The policy has been extended to development banks and finance companies as well.
- There will be no need of 20 per cent additional loan loss provision on the loans extended to the deprived sector, according to the policy.
- To boost investment in major infrastructure projects, the policy has raised the existing single borrowing limit to 25 per cent of the primary capital while extending loans to sectors that require huge investments like hydropower.
- The policy has announced to slash export refinance on Nepali currency by one percentage point to 2.5 per cent but a cap on lending interest rate of five per cent has been set for commercial banks extending such loans.
- The central bank has also announced to extend concessionary refinance at 2.5 per cent to support the revival of cottage and small scale industries, but the retail interest rate of such loans should be less than 5.5 per cent.
- NRB continued the policy of extending loans to sick industries at a concessionary rate of 1.5 per cent. However, the policy has made it clear that commercial banks dealing with such loans are not allowed to charge an interest rate if more than 4.5 per cent.
- In order to check possible misuse of short-term loans being provided to development banks and finance companies by commercial banks, the NRB has raised penal interest on such loans.
- The monetary policy has also lowered the service charge that the commercial banks have to pay to the central bank while exchanging foreign currency to one per cent from two per cent.
- The rate of commission that banks charge to the customer while buying convertible currencies will come down by the same level.
- The policy estimates that the board money supply (M1) will remain at 15.6 per cent against the estimated 15 per cent recorded last year.
- Internal loan is expected to grow by 17.1 per cent and the total loan investment from banking sector to private sector is likely to increase by 18.5 per cent during the current fiscal year.
- Like in the past, the bank has taken more steps to liberalise the foreign exchange (forex) regime. The policy has added a new mechanism making imports possible using documents against payment in addition to the existing letter of credit (LoC) or draft/TT facilities.
- Traders can import raw materials and intermediate products from India against payment of US dollar.
- The ongoing financial reform programmes will continue.
- The policy has also warned the stock market that the current bullish trend defies the market fundamentals.
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