Kathmandu, July 26
The coronavirus pandemic and its impact on the
movement of goods across the border has resulted in a significant slump in
Nepal's trade deficit.
Total trade deficit was improved Rs. 221 billion in
the last fiscal 2019/20 against that of the previous year 2018/19, according to
the latest statistics of the Department of Customs (DoC) published on Sunday.
The country's trade deficit is reduced by 16.71 per
cent in FY 2019/20 compared to the previous fiscal 2018/19 with the trading of
goods worth Rs. 1,100.6 billion and Rs. 1,321.4 billion respectively.
The size of deficit is even smaller than Rs. 1,163.7
billion of the FY 2017/18. It was the year when the country witnessed all time
high export import ratio 1:15.3 with 6.1 per cent export's share in total
trade.
However, the improvement in the foreign trade was not
because of the increase in the exports of goods but of the significant
reduction in the imports. The actual export of goods was reduced from Rs. 97.1
billion to Rs. 96.1 billion from 2018/19 to 2019/20 while there was a
significant rise in the outward movement of goods compared to Rs. 81.3 billion
of FY 2017/18.
The export trade had begun to witness an improvement
from the beginning of the last fiscal year. Had the trend been continued the
country was likely to meet the threshold of Rs. 100 billion exports for the
first time in its history.
By the end of the eight months of the last fiscal,
till 10 days before the government imposed the lockdown amidst the advent of
the deadly COVID-19 pandemic, Nepal's export had risen by 22.3 per cent to Rs.
74.91 billion compared to the same period of the previous year.
However, pandemic slowed the speed of the inward and
outward trade.
The decrease in imports has resulted in the growth of
balance of payment and reduction in current account deficit. The balance of
payment in the 11 months of the last fiscal was Rs. 179.37 billion while it was
in Rs. 90.8 billion deficit in the previous year. Likewise, the current account
deficit was Rs. 71.6 billion last year against Rs. 249.08 billion of the
previous year.
The country has Rs. 1306.4 billion foreign exchange
reserve sufficient to manage the import of goods and services for 11.7 months.
Trade Partners
India is the largest trade partner of Nepal with the
import of Rs. 735 billion and Rs. 69 billion respectively. China, Indonesia,
the United States of America and United Arab Emirates are the other top trade
partners.
Nepal's largest export markets include India, USA,
Germany, Turkey and the United Kingdom. Last year, the country exported goods
worth Rs. 9.22 billion to the USA, Rs. 2.64 billion to Germany, Rs. 2.1 billion
to Turkey and Rs. 2 billion to the UK.
Similarly, according to the DoC, major exports are the
palm oil, soya bean oil, carpet, woolen cloth and jute while imports are
diesel, half-refined iron and steel, petrol, cooking gas and rice. The agrarian
country had imported rice worth Rs. 18.5 billion in the last fiscal. Likewise,
Nepal had spent about Rs. 143 billion in importing the petroleum products.
Trade direction
|
S.N. |
Indicators |
FY
2018/19 |
FY
2019/20 |
Change (%) |
|
1. |
Imports
(Rs.) |
1,418.5
bn |
1,196.8
bn |
-15.63 |
|
2. |
Exports
(Rs.) |
97.1 bn |
96.1 bn |
-0.98 |
|
3. |
Trade
Deficit (Rs.) |
1,321.4
bn |
1,100.6
bn |
-16.71 |
|
4. |
Export/import
ratio |
14.61% |
12.45% |
-14.8 |
|
5. |
Export
share in trade |
6.41% |
7.44% |
16.07 |
|
6. |
Import
share in trade |
93.6% |
92.56% |
-1.10 |
Source: Department of Customs
Published in The Rising Nepal daily on 27 July 2020.
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