Remmitance inflow swells by 11.5 pecent

KATHMANDU, NOVEMBER 19: The country received Rs 407.31 billion in remittances during the first three months of the current fiscal year, according to the central bank. "Remittance inflows increased by 11.5 percent to Rs 407.31 billion in the review period, compared to a 25.8 percent increase in the same period of the previous year," stated Nepal Rastra Bank (NRB) in its Current Macroeconomic and Financial Situation of Nepal Report, which covers data for three months ending mid-October.

In US Dollar terms, remittance inflows reached $3.04 billion, up from $2.76 billion in the same period last year, the NRB reported.

The number of Nepali workers obtaining first-time approval for foreign employment was 110,654, while those seeking renewed entry approvals totaled 59,939 over the past three months. In the same period last year, 113,397 workers received first-time approvals for overseas employment.

Current Account and Balance of Payments

The government's current account registered a surplus of Rs 111.87 billion during the review period, up from a surplus of Rs 59.65 billion a year earlier. "Net capital transfer stood at Rs 2 billion, and foreign direct investment inflow (equity only) was Rs 4.81 billion," according to the NRB.

The Balance of Payments (BOP) also recorded a surplus of Rs 184.99 billion, compared to a surplus of Rs 101.66 billion in the same period the previous year. Gross foreign exchange reserves increased by 9.4 percent to Rs 2,232.28 billion as of mid-October 2024, up from Rs 2,041.10 billion in mid-July 2024.

The report also highlighted that the year-on-year unit value export price index rose by 2.9 percent, while the import price index fell by 3.5 percent, improving the terms of trade index by 6.5 percent. Meanwhile, net services income registered a deficit of Rs 23.29 billion, an improvement from the Rs 29.39 billion deficit recorded in the same period last year.

Export and Import Trends

Over the past three months, exports and imports declined by 6.1 percent and 4.2 percent, respectively. Exports fell to Rs 38.38 billion, a sharper decline compared to a 2.3 percent decrease in the same period last year. Exports to India, China, and other countries dropped by 5.3 percent, 24.8 percent, and 6.6 percent, respectively. Notable increases were observed in exports of soybean oil, tea, particle board, shoes and sandals, and oil cakes, while exports of zinc sheets, palm oil, cardamom, juice, and readymade garments declined.

Imports decreased to Rs 390.75 billion, marking a 4.2 percent decline compared to a 1.7 percent increase a year earlier. Imports from India, China, and other countries decreased by 3.9 percent, 1.5 percent, and 7.9 percent, respectively.

The total trade deficit narrowed by 4 percent to Rs 352.37 billion, compared to a 2.1 percent increase in the same period last year. The export-import ratio fell slightly to 9.8 percent from 10 percent a year ago.

Inflation Insights

Consumer prices rose by 4.82 percent in mid-October, down from a 7.5 percent increase in the same period last year. Food and beverage inflation stood at 7.18 percent, while non-food and service inflation was 3.49 percent.

Within the food and beverage category, the year-on-year price index for vegetables surged by 25.15 percent, pulses and legumes by 10 percent, cereal grains and their products by 9.57 percent, and ghee and oil by 4.98 percent. However, the meat and fish sub-category saw a price decrease of 1.18 percent.