Inflation down to single digit

Kathmandu, Feb 19 –  Inflation has again come down to single digit in the sixth month (mid-January) after reaching double digits in the previous two months.

 

According to a Nepal Rastra Bank (NRB) report on macro-econmoy published on Tuesday, price rise remained at 9.7 percent in mid-January 2014 as against 10.3 percent in mid-December and 10 percent in mid-November 2013.

 

The inflation in sixth month ending mid-January was lower than the same period a year ago. The inflation was 9.8 percent at the same time last fiscal. 

 

Food inflation remained at 12.9 percent while prices of non-food products stood at 6.9 percent.  Food inflation has been driving force this year as non-food items had risen last year with food inflation remaining at 9.6 percent and non-food inflation at 10.2 percent.

 

 In the review period, the prices of tobacco registered the steepest rise of 25.3 percent, followed by meat and fish, beverages and vegetables prices.

 

Among the non-food items, prices of clothing items remained the highest, surging by 12.2 percent followed by furnishing and household equipment and health sector.

 

During the review period, balance of payment (BoP), recorded a surplus of Rs 77.19 billion compared to a surplus of just Rs 7.77 billion. BoP is the balance of monetary resources that came in against the the amount that went out of the country.

 

According to NRB, the upsurge in tourism income, grants and workers’ remittance vital role in making surplus BoP.

 

Remittance surged by 34.4 percent to Rs. 265.62 billion compared to an increase of 21.8 percent in the same period of the previous year.

 

The tourism income also rose by 39.2 percent and the government received more than Rs 32 billion in grants during the review period as against around Rs 12 billion received in the same period last year.

The gross foreign exchange reserve increased by 17.1 percent to Rs. 624.60 billion in mid-January 2014 from a level of Rs. 533.30 billion in mid-July 2013, according to the NRB. The foreign exchange reserve is sufficient for import of goods and services for 10.2 months.

 

The report says the country’s exports rose by 15 percent to Rs 45.14 billion during the review period, while imports surged by 23.1 percent to Rs 333.9 billion. Due to surging imports, trade deficit of the country rose by 24.4 percent to Rs 288.76 billion.

 

During the review period, the government’s failure to spend resulted in its treasury holding as high as Rs 56.1 billion rupees. Particularly, the government failed to spend capital budget whose expenditure figure stood at just Rs 9.28 billion against the annual target of Rs 85 billion in the review period. The loans and advances of banks and financial institutions increased by 7.3 percent to Rs 83.66 billion as against 11.2 percent growth to Rs. 108.17 billion in the  same period last year.

 

Deposit mobilisation was, however, higher with a growth of Rs 95.41 billion compared to the rise of Rs 54.13 billion in the corresponding period last fiscal.

 

 

Source: ekantipur