Total foreign trade surges 68.1 per cent – The Himalayan Times – Nepal’s No.1 English Daily Newspaper

Total foreign trade surges 68.1 per cent - The Himalayan Times - Nepal's No.1 English Daily Newspaper

https://thehimalayantimes.com/business/total-foreign-trade-surges-681-per-cent

KATHMANDU, NOVEMBER 16

Nepal’s total foreign trade in the first three months of the current fiscal year (mid-July to mid- October) surged by 68.1 per cent to Rs 543.58 billion, the latest macroeconomic update of the Nepal Rastra Bank unveiled today showed.

During the three months of 2021-22, merchandise exports increased 109.5 per cent to Rs 65.05 billion compared to an increase of 14.3 per cent in the same period of the previous year. Meanwhile, merchandise imports increased 63.7 per cent to Rs 478.52 billion against a decrease of 12.7 per cent a year ago.

Owing to this mismatch, the total trade deficit soared by 58.3 per cent to Rs 413.47 billion during the review period. Such a deficit had contracted 15.1 per cent in the corresponding period of the previous year.

As per the Broad Economic Categories (BEC), the intermediate and final consumption goods accounted for 41.76 per cent and 58.22 per cent of the total exports respectively, whereas the ratio of capital goods in total exports remained negligible at 0.03 per cent in the review period.

foreign trade

foreign trade

In the same period of the previous year, the ratio of intermediate, capital and final consumption goods remained 32.6 per cent, 0.9 per cent and 66.5 per cent of total exports, respectively.

On the imports side, the share of intermediate goods remained 53 per cent, capital goods 11 per cent and final consumption goods at 36 percent in the review period. Such ratios were 51.2 per cent, 13.1 per cent and 35.7 per cent respectively in same period of previous year.

Based on the imports of three months of current fiscal, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 8.6 months, and merchandise and services imports of 7.8 months.

The ratio of reserves-to-GDP, reserves-to-imports and reserves-to-M2 stood at 30.9 per cent, 64.7 per cent and 25.1 per cent respectively, in mid-October 2021. Such ratios were 32.8 per cent, 84.7 per cent and 27.1 per cent in mid-July 2021.

Net services income remained at a deficit of Rs 23.79 billion in the review period compared to a deficit of Rs 11.94 billion in the same period of the previous year, according to the central bank report.

Remittance inflows decreased 7.6 per cent to Rs 239.32 billion in the review period against an increase of 12.7 per cent in the same period of the previous year.

The current account remained at a deficit of Rs 151.70 billion in the review period against a surplus of Rs 33.38 billion in the same period of the previous year. In the review period, capital transfer decreased 45.9 per cent to Rs 1.92 billion but net foreign direct investment (FDI) increased 73.5 per cent to Rs 5.07 billion. In the same period of the previous year, capital transfer and net FDI amounted to Rs 3.56 billion and Rs 2.92 billion, respectively.

The balance of payments (BoP) remained at a deficit of Rs 76.14 billion in the review period against a surplus of Rs 101.09 billion in the same period of the previous year.

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