Prices, imports go up in first 8 months: NRB

Kathmandu, Apr 21

Price of goods has gone up in the first eight months of the current fiscal year 2019/20 as compared to previous year.

The year-on-year consumer price inflation stood at 6.7percent in mid-March 2020 compared to 4.2 per cent a year ago. Food and beverage inflation stood at 4.69 per cent in same period of the previous year, Nepal Rastra Bank said in its eight months' report on macroeconomic situation of the country.

Price of vegetables, spices, pulses and legumes, meat and fish rose significantly in the eighth month of the fiscal while price of education, health, clothes and footwear rose moderately.

In the review month, the Kathmandu Valley witnessed 7.61 per cent inflation followed by 6.84 per cent in the Terai, 5.53 per cent in the Hill and 5.42 per cent in the Mountain. These regions had witnessed 4.61 per cent, 3.61 per cent, 4.64 per cent and 5.47 per cent inflation respectively a year ago.

Exports went up

According to the central bank's report, Nepal's export rose by 22.3 per cent to Rs. 74.91 billion in the first eight months of the fiscal. Last year, export had witnessed an increase of 15.6 percent.

Destination-wise, exports to India and other countries increased 35.5 per cent and 1.1 per cent respectively whereas exports to China decreased  by 19.4 per cent. Exports of palm oil, cardamom, medicine (ayurvedic), herbs, jute goods, among others, increased whereas exports of zinc sheet, wire, readymade garment, juice, copper wire rod, among others, decreased during the review period.

Similarly, merchandise imports decreased by 2.6 per cent to Rs.924.24 billion against an increase of 23.8 per cent in the same period of the previous year.

Destination-wise, imports from China and other countries increased by 5.5 per cent and 6.8 per cent respectively whereas imports from India decreased 7.5 percent.

With this, the total trade deficit narrowed down by 4.3 per cent to Rs.849.33 billion in the eight months of 2019/20. Such deficit had expanded 24.4 per cent in the same period of the previous year.

Remittance inflow increased

 Remittance inflows increased by 1.8 per cent to Rs.592.42 billion in the review period compared to an increase of 23.4 per cent in the same period of the previous year. However, the growth rate for the number of Nepali workers going abroad decreased.

Number of Nepali workers taking approval for foreign employment increased by 24.2 per cent in the review period. It had decreased by 36.6 percent in the same period of the previous year.

Net transfer income increased b 1.4 per cent to Rs.671.89 billion in the review period. Such income had increased by 22.9 per cent in the same period of the previous year.

Current account deficit went down

The current account registered a deficit of Rs. 124.93 billion in the review period. Such deficit was Rs.191.49 billion in the same period of the previous year.

Balance of Payments (BOP) remained at a surplus of Rs.37.84 billion in the review period against a deficit of Rs.58.99 billion in the same period of the previous year.

Gross foreign exchange reserves increased by 9.4 per cent to Rs.1136.51 billion as at mid-March 2020 from Rs.1038.92 billion as at mid-July 2019. In the US Dollar terms, the gross foreign exchange reserves increased to 9.60 billion as at mid-March 2020 from 9.50 billion as at mid-July 2019.

Financial Access

Of the total 753 local levels, commercial banks extended their branches at 746 levels as of mid-March 2020.

The total number of BFIs licensed by NRB is 162 by mid-March 2020. Of which, 27 commercial banks, 23 development banks, 22 finance companies, 89 microfinance institutions and are infrastructure development bank are in operation.

The number of BFIs branches reached 9,640 in mid-March 2020 from 8,686 in mid-July 2019.

Published in The Rising Nepal daily on 22 March 2020.