Trade deficit shrinks, so does export

Kathmandu, June 22

Owing to the import control measures that the government implemented in the current Fiscal Year 2022/23, trade deficit of Nepal has gone down by more than 15 per cent in 11 months this year against the increment of 25 per cent in the previous FY 2021/22.

Nepal's trade deficit came down to Rs. 1337.4 billion in mid-June 2023 from Rs. 1577.4 billion in mid-July 2022, according to the statistics of the Department of Customs (DoC) published on Thursday.

Despite this correction in the international trade, Nepal's imports/exports ratio has gone up to 10.31 this year from 9.49 last year which is a growth of 8.71 per cent. Two years before in 2020/21, such ratio was 11.41.

However, the correction in the trade deficit is not the result of the increased export trade of Nepal but significant fall in imports.

Imports in the 11-month period this year have gone down significantly to Rs. 1480.98 billion from Rs. 1763.22 billion in the same period last year. This is a fall of 16.01 per cent.

But exports have gone down by 22.74 per cent to hit Rs. 143.58 billion in mid-June this year from Rs. 185.83 billion in mid-June 2022.

According to the DoC, Nepal's trade balance has remained in surplus, although with a negligible amount of below Rs. 1 billion, with Denmark, Norway, Algeria, Niger, Cambodia, Uruguay, Chad, Latvia, Afghanistan and the Maldives. The highest positive trade balance is Rs. 436 million with Denmark.

However, Nepal's largest trade partners are India, China, Indonesia, United Arab Emirates, Argentina, Malaysia, Ukraine, Australia and Qatar. Nepal witnesses a large trade deficit with all of these nations. Trade deficit with India is Rs. 838.8 billion, China Rs. 200.8 billion, Indonesia Rs. 39.7 billion, the UAE Rs. 30.7 billion, Argentina Rs. 23 billion and Malaysia Rs. 21 billion.

Nepal imported goods worth Rs. 17.3 billion from the war-affected Ukraine but export to this European nation is just Rs. 9.7 billion.

Nepal's major imports this year are diesel, petrol, cooking gas, iron, crude palm oil, crude soya-bean oil, Air Turbine Fuel (ATF) and gold. Total import of petroleum products from India amounts Rs. 272.23 billion (18.38 per cent of the total import).

Last year in the same period, Nepal imported the petroleum products worth Rs. 280.16 billion.

Likewise, imports of palm oil and soya-bean oil stand at Rs. 21.64 billion and Rs. 21.33 billion respectively.

Likewise, major exports from Nepal are carpets, textiles and woolen products, palm oil, soya-bean oil, large cardamom, juice, felt, yarn and tea. Carpet tops the export category with Rs. 10.32 billion while palm oil products stand combined at Rs. 16.32 billion and soya-bean oil Rs. 8.47 billion. 

Published in The Rising Nepal daily on 23 June 2023.