The country witnessed a total trade deficit of Rs 330.34 billion in the fiscal year 2010-11 — up by 5.4 per cent compared to a fiscal year ago, according to annual macro-economic report of 2010-11 published by the central bank here today.
The total exports is still less than six times to Rs 64.56 billion from total merchandise import of Rs 394.90 billion, the central bank said, “but export trade — which had declined by 10.2 per cent a fiscal year ago, recorded a growth of 6.1 per cent.”
“Merchandise imports, however, increased by 5.5 per cent to Rs 394.90 billion primarily led by strong growth (43.9 per cent) of petroleum product import,” it said, adding that the ratio of export to import increased marginally to 16.3 per cent compared to a growth of 16.2 per cent a fiscal year ago.
However, the share of India in Nepal’s total trade increased to 66.4 per cent in 2010-11 compared to 59.1 per cent a fiscal year ago.
But the overall Balance of Payment (BoP) that had remained in deficit till the ten months ended with a ‘surprise’ Rs 2.93 billion surplus against a deficit of Rs 3.63 billion in a fiscal year.
The central bank attributed improvement in the BoP to the significant moderation in the current account deficit coupled with satisfactory increase in the government capital transfers and external loan. “The current account deficit shrank to Rs 11.91 billion from a deficit of Rs 28.14 billion a year ago,” it added.
The current account deficit to GDP ratio improved to 0.9 per cent from 2.4 per cent a year ago. The service account deficit declined considerably by 47.7 per cent to Rs 8.57 billion.
Similarly, the net transfer account registered a growth of 8.9 per cent to Rs 307.86 billion compared to that of a year ago, as the pension receipts rose by 12.2 per cent to Rs 28.99 billion and workers’ remittances increased by 9.4 per cent to Rs 253.55 billion. Likewise, under the financial account, FDI of Rs 6.44 billion was recorded compared to the level of Rs 2.85 billion a fiscal year ago.
Under the capital account, capital transfer increased by 26.5 per cent to Rs 15.91 billion compared to the level of Rs 12.58 billion a fiscal ago, whereas gross foreign exchange reserves increased by a mere 1.2 per cent to Rs 272.10 billion in mid-July from the level of Rs 268.91 billion as at mid-July 2010. Of total reserve, NRB’s reserves augmented by 3.8 per cent to Rs 213.09 billion in mid-July 2011 from a level of Rs 205.37 billion as at mid-July 2010, it said, adding that the gross foreign exchange reserves in Us dollar terms increased by 6.2 per cent to $3.84 billion in mid-July.
Based on the trend of import during the review year, the current level of reserves is sufficient for financing merchandise imports of 8.4 months and merchandise and service imports of 7.3 months.(Source:The Himalayan Times)