‘Country’s BOP remains at a deficit of Rs 35.42 billion’

Kathmandu, Nov. 25 . The Nepal Rastra Bank (NRB) has said that the inflation in the country remained 4.7 per cent on year on year basis. Releasing the Current Macroeconomic and Financial Situation of Nepal based on the first three month of the current fiscal year, the central bank said that country’s imports expanded 43.6 per cent while export increased just by 16.1 percent.

“The year on year consumer price inflation increased 4.7 percent in mid-October 2018 from 3.1 percent a year ago. Increase in the price of food, vegetables, meat, fish, alcoholic drinks, as well as housing and utilities contributed to the rise in overall inflation in the review period,” according to the NRB report.

It is said that hilly region witnessed relatively higher rate of inflation of 6.1 percent followed by 4.3 percent in Terai, 4.2 percent in Mountain and 4.0 percent in the Kathmandu Valley in the review period.

During the review period, merchandise exports increased 16.1 percent to Rs.23.74 billion compared to an increase of 8.1 percent in the same period of the previous year.

Destination-wise, exports to India, China and Other countries increased 20.2 percent, 14.4 percent and 11.2 percent respectively in the review period. Mainly, exports of polyester yarn, zinc sheet, woolen carpet, pashmina, tooth paste, among others, increased whereas export of cardamom, rosin, tanned skin, G.I. pipes, aluminium section, among others, decreased in the review period, the report mentions.

Regarding the remittance inflow, the NRB said that the workers’ remittances increased 37.3 percent to Rs.242.17 billion in the review period compared to a growth of 2.6 percent in the same period previous year.

In US Dollar terms, workers’ remittances increased 24.5 percent in the review period compared to 6.6 percent in the corresponding period previous year. According to the central bank, the number of Nepalis workers migrated for foreign employment decreased 36.7 percent in the review period. It had decreased 2.6 percent in the same period of the previous year. In the review period, the number of workers outbound to Malaysia shrank noticeably.

The current account registered a deficit of Rs.81.96 billion in the review period. The current account had registered a deficit of Rs.25.52 billion in the same period previous year. Likewise, the overall balance of payment (BOP) remained at a deficit of Rs.35.42 billion in the review period in contrast to a surplus of Rs.4.27 billion in the same period previous year.