Remittance, balance of payment, forex reserves catch upward trend
By A Staff Reporter
Kathmandu, Dec. 14
The inflation rate has significantly moderated to 5.38 per
cent by mid-November 2023 from 7.5 per cent from a month earlier.
According to the Current Macroeconomic and Financial
Situation report of the first four months of the current Fiscal Year 2023/24
published by the Nepal Rastra Bank (NRB) on Thursday, the year-on-year consumer
price inflation moderated to 5.38 per cent in mid-November 2023 compared to
8.08 per cent a year ago.
Food and beverage category inflation stood at 6.01 per cent
whereas non-food and service category inflation stood at 4.89 per cent in the
review month. Under the Food and Beverage Category, y-o-y consumer price index
of spices subcategory increased by 36.46 per cent, sugar and sugar products by
14.59 per cent, fruit by 14.01 per cent, cereal grains and their products by 12.02
per cent, and milk products and eggs by 11 per cent.
However, the y-o-y consumer price index of the ghee and oil
and vegetable sub-category decreased by 14.23 per cent and 5.35 per cent
respectively by mid-November.
Under the Non-Food and Services Category, the y-o-y consumer
price index of the recreation and culture sub-category increased by 12.84 per
cent, miscellaneous goods and services by 10.76 per cent, education by 8.92 per
cent, furnishing and household equipment by 5.27 per cent, and clothes and
footwear by 4.96 per cent.
In the review month, y-o-y consumer price inflation in the
Kathmandu Valley, Tarai, Hill and Mountain regions stood at 6 per cent, 4.42
per cent, 6.07 per cent, and 8.79 per cent respectively. Inflation in these
regions was 7.56 per cent, 8.52 per cent, 8.03 per cent and 6.68 per cent respectively
a year ago, read the report.
Remittance inflow sustains growth
Remittance inflows continued registering an impressive
growth. It increased by 26.4 per cent to Rs. 477.96 billion in the review
period compared to an increase of 20.4 per cent in the same period of the
previous year.
In the first four months of the current fiscal, the number
of Nepali workers, both institutional and individual, taking firsttime approval
for foreign employment stands at 137,475 and taking approval for renew entry
stands at 68,841. It is less than the last year's 196,735 and 87,428
respectively.
Likewise, the current account remained at a surplus of Rs.
96.38 billion in the four months against a deficit of Rs. 37.79 billion in the
same period of the previous year.
While capital transfer decreased by 46.6 per cent to Rs.1.59
billion, net foreign direct investment (FDI) remained a positive of Rs.3.64
billion. In the same period of the previous year, capital transfer amounted to
Rs.2.97 billion and net FDI amounted to Rs.429.2 million.
BOP at surplus
Similarly, the Balance of Payments (BOP) remained at a
surplus of Rs.147.11 billion this year against a surplus of Rs.20.03 billion in
the same period of the previous year.
According to the NRB, gross foreign exchange reserves
increased by 10.2 per cent to Rs.1696.78 billion in mid-November 2023 from
Rs.1539.36 billion in mid-July 2023.
Based on the imports of four months of 2023/24, the foreign
exchange reserves of the banking sector is sufficient to cover the prospective
merchandise imports of 13.6 months, and merchandise and services imports of
11.3 months.
However, merchandise exports decreased by 7.7 per cent to
Rs.50.57 billion compared to a decrease of 33.3 per cent in the same period of
the previous year.
Destination-wise, exports to India decreased 14.5 per cent
whereas exports to China and other countries increased by 307.9 per cent and
4.7 per cent respectively.
Import, export down
Similarly, merchandise imports decreased by 3.8 per cent to
Rs.512.50 billion compared to a decrease of 18.1 per cent a year ago.
Destination-wise, imports from India and other countries decreased by 2.5 per cent
and 27.7 per cent respectively while imports from China increased by 34.4 per cent.
Imports of readymade garments, M.S. wire rod, bars, and coils, electrical
equipment, textiles, aircraft spare parts, among others increased whereas
imports of crude soyabean oil, gold, petroleum products, crude palm oil, MS
billet, among others decreased.
The share of intermediate goods in the imports remained at 49.2
per cent, capital goods at 8.8 per cent and final consumption goods at 42.1 per
cent by mid-November.
Published in The Rising Nepal daily on 15 December 2023.
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