Kathmandu, Jan 19, 2016: The Nepal Rastra Bank (NRB) on Monday made public the current macroeconomic and financial situation based on the data review of the first five months of the ongoing fiscal year, indicating negative trajectory of export trade.
The merchandise export saw a negative growth of 29.1 per cent to remain at Rs 26.17 billion in the first five months of 2015/16. The Indian government undeclared blockade has virtually frozen the customs points in the south while the recent Gorkha Earthquake resulted in the obstruction of the Tatopani point in the northern border triggering a general economic turbulence in the country.
Commodity wise, the export of zinc sheet, textiles, clothing, juice and GI Pipe to India has come down while export of tanned skin, noodles, readymade garments to China has also declined. Similarly, export of pulses, tanned skin, tea and handicrafts to other countries has sharply fallen. In the corresponding period last year, the export saw 1.2 per cent decline with trade standing at Rs 36.91 billion.
In the period under review, the merchandise import dropped drastically by 32 per cent with trade standing at 213.83 billion. In the same period last year, import had shot up by 16.3 per cent with trade rising to Rs 314.52 billion. â€œThe decrease in imports is attributed mainly to a decrease in imports of goods including petroleum products on account of unrest in southern plains along with obstruction at customs points,â€ NRB said.
According to the Bank, imports fell by 39.2 per cent, 14.1 per cent and 22.6 per cent to India, China and other countries respectively. Commodity wise, the import of fuel products in the corresponding period last year stood at Rs 49.88 billion which this year shrank by whopping 63.2 per cent to stand at Rs 18.35 billion.
Imports of machinery spare parts, steel rod, crude soybean oil and edible oil among capital, industrial raw material and consumer goods have fallen sharply. â€œAs a result, total trade deficit in the review period contracted by 32.4 per cent to Rs 187.66 billion compared to an expansion of 19.1 per cent in the same period of previous year,â€ it is stated.
Significant growth in workersâ€™ remittances
The significant growth in workersâ€™ remittances by 19.4 per cent to Rs 271.4 billion was the fifth prominent feature of the external sector development in the review period, NRB said. A year ago, the growth in remittances was 2.7 per cent. Consequently, net transfer receipt increased by 22 per cent to Rs 315.50 billion in the review period. However, the number of Nepali workers seeking foreign employment, based on final approval for foreign employment, decreased by 22.6 per cent in the first five months under review whereas it had increased by 28.6 per cent in the corresponding period last year.
Foreign Exchange Reserves increment
The accumulation of the gross foreign exchange reserves as of mid December 2015 remained at Rs 9895.52 billion â€“ a 19.6 percent increment from Rs 824.06 billion in mid-July 2015.
The foreign exchange reserves held by NRB increased by 20.3 per cent to Rs 845.89 billion as of mid-December 2015 from the level of reserves as of mid-July 2015. The share of Indian currency reserves in total reserves stood at 21.1 per cent.
Paddy production shrinks
As per the report published by NRB, the production of paddy crop is estimated to decline by 10 per cent while maize production may see an estimated four per cent growth. The difficulty in supply of chemical fertilizer has severely impacted winter crops, particularly wheat production.
The prices of food and potable commodities have increased. The price of pulses has grown by 48.9 per cent while price of ghee and oil has soured by 42.3 per cent.