KATHMANDU, FEBRUARY 6: The first half-yearly review of the current fiscal year 2080-81 BS (2023-24) suggests upward trends in various economic and financial indicators. According to the central bank’s assessment, based on the first six months of the current fiscal, there is an improvement in overall economic and financial indicators. Remittance inflows increased by 25.3 percent to reach Rs.733.22 billion in the review period, compared to a 24.3 percent increase in the same period last year.
In US Dollar terms, remittance inflows rose by 22.6 percent to 5.52 billion compared to an increase of 13.9 percent in the same period of the previous year. From mid-June to mid-January of 2023/24, the number of Nepali workers, both institutional and individual, taking first-time approval for foreign employment stood at 207,970 and taking approval for renewed entry stood at 135,435. In the previous year, such numbers were 275,643 and 142,548 respectively.
The Net transfer increased 24 per cent to Rs.799.51 billion in the review period. Such a transfer had increased 22.7 per cent in the same period of the previous year. The Balance of Payments (BOP) remained at a surplus of Rs.273.52 billion in the review period against a surplus of Rs.92.15 billion in the same period of the previous year. In US Dollar terms, the BOP remained at a surplus of 2.06 billion in the review period against a surplus of 697.4 million in the same period of 2022/23.
The gross foreign exchange reserves increased by 18.0 percent to Rs.1816.57 billion in mid-January 2024 from Rs.1539.36 billion in mid-July 2023. In US dollar terms, the gross foreign exchange reserves saw an increase of 16.9 percent to reach 13.69 billion in mid-January 2024 from 11.71 billion in mid-July 2023. Similarly, broad money (M2) increased by 6.4 percent while on a y-o-y basis, M2 expanded by 14.3 percent. Deposits at banks and financial institutions rose by 6.6 percent and private sector credit increased 4 percent.
On y-o-y basis, deposits increased 14.9 percent and private-sector credit increased 4.9 percent. The y-o-y consumer price inflation moderated to 5.26 percent in mid-January 2024 compared to 7.26 percent a year ago. Food and beverage category inflation stood at 5.77 percent whereas non-food and service category inflation stood at 4.85 percent in the review month. As the report states, the y-o-y price index of ghee and oil, vegetables, meat & fish and transportation sub-categories exhibited a downward trend in mid-January 2024.
Additionally, the price index of spices and sugar and sugar products are also moderating. During the review month, the y-o-y import price index, salary and wage rate index and the wholesale price index were also moderated. These factors contributed to a moderated consumer price inflation Under the Food and Beverage Category, the y-o-y price index of ghee and oil, vegetable and meat and fish sub-category decreased by 13.07 percent, 1.04 percent and 0.06 percent respectively in the review month.
The y-o-y price index of the spices sub-category increased by 35.60 percent, cereal grains and their products by 11.38 percent, pulses and legumes by 11.14 per cent, milk products and eggs by 10.29 percent and fruit by 10.15 per cent. Under the Non-Food and Services Category, the y-o-y price index of the transportation sub-category decreased by 1.62 percent in the review month. The y-o-y price index of the recreation and culture subcategory increased by 12.84 percent, miscellaneous goods and services by 9.73 percent, education 8.92 percent, furnishing and household equipment 5.18 percent and clothes and footwear 4.96 percent.
The y-o-y consumer price inflation in the Kathmandu Valley, Terai, Hill and Mountain region stood at 5.76 percent, 4.78 percent, 5.40 percent and 6.57 percent respectively in the review month. Such inflation in these regions was 6.93 percent, 7.49 percent, 7.30 percent and 6.69 percent respectively a year ago. The y-o-y wholesale price inflation stood at 3.36 percent in mid-January 2024 compared to 9.82 percent a year ago. The y-o-y wholesale price index of consumption goods, intermediate goods and capital goods increased 6.16 percent, 1.99 percent and 2.71 percent respectively.
The y-o-y wholesale price index of construction materials decreased 1.08 percent in the review month. The y-o-y salary and wage rate index increased 5.56 percent in mid-January 2024 compared to 10.27 percent a year ago. The y-o-y Salary index and Wage rate index increased 1.05 and 6.92 percent respectively in the review month. Imports fell by 3.1 percent, exports by 7.2 percent and the trade deficit by 2.6 percent.