KATHMANDU, NOVEMBER 25
Even though the adverse impact of COVID-19 was witnessed on various sectors of the economy, particularly external trade, capital spending of the government and credit expansion of banks and financial institutions (BFIs), most of the economic indicators were positive in the first quarter of the current fiscal year.
As per the ‘Current Macroeconomic and Financial Situation of Nepal’ report of the first three months of 2020-21 (mid-July to mid-October) unveiled by Nepal Rastra Bank (NRB) today, remittance inflows surged 12.6 per cent to Rs 258.86 billion in the review period against a decrease of 5.1 per cent in the same period of the previous year.
Similarly, merchandise exports surged 14.3 per cent to Rs 31.05 billion compared to increase of 14.4 per cent in same period of previous year. While merchandise imports slumped 12.7 per cent to Rs 292.27 billion compared to a decrease of 10.3 per cent a year ago.
The total trade deficit narrowed down 15.1 per cent to Rs 261.22 billion in the review period.
Such deficit had contracted 12 per cent in the same period of the previous year. The export-import ratio increased to 10.6 per cent in the review period from 8.1 per cent in the same period of the previous year.
According to the report, although imports of industrial supplies, fuel, capital goods, transport equipment, parts and accessories had decreased owing to impact of COVID-19 on the economy in initial period of lockdown, such imports have increased in between mid-September to mid-October.
In the review period, the total expenditure of the federal government stood at Rs 176.99 billion.
Such expenditure was Rs 172.33 billion in the corresponding period of the previous year. Similarly, revenue collection stood at Rs 72.36 billion.
Total government revenue was Rs 211.28 billion in the corresponding period of the previous year.
Deposits at BFIs increased 4.9 per cent and claims on private sector increased 4.2 per cent in mid-October. However, on a year-on-year basis, deposits at BFIs surged 20.9 per cent and claims on private sector increased 12.4 per cent in the review period.
The NRB report also shows that the capital market is going an upward trend. NEPSE index stood at 1,562.5 points in mid-October compared to 1,137.8 points a year ago. The benchmark index was at 1,362.4 points in mid-July.
Meanwhile, the year-on-year consumer price inflation came in at 3.79 per cent in mid-October compared to 6.21 per cent a year ago. Food and beverage inflation stood at 5.50 per cent whereas non-food and service inflation stood at 2.46 per cent in the review month. The price of vegetable sub-group rose 23.1 per cent and pulses and legumes sub-group rose 13.86 per cent on year-on-year basis.
Similarly, the year-on-year wholesale price inflation stood at 8.26 per cent in the review month compared to 7.29 per cent a year ago. The year-onyear wholesale price of consumption goods, intermediate goods and capital goods increased 8.87 per cent, 8.78 per cent and 3.13 per cent respectively whereas the wholesale price of construction materials dropped 2.13 per cent in the review month.
The current account remained at a surplus of Rs 34.36 billion in the review period against a deficit of Rs 22.47 billion in the same period of the previous year.
In the review period, capital transfer fell 3.3 per cent to Rs 3.56 billion and net foreign direct investment (FDI) shrank 26.8 per cent to Rs 2.92 billion.
In the same period of previous year, capital transfer and net FDI amounted to Rs 3.68 billion and Rs 3.99 billion respectively.
Balance of payments (BoP) registered a surplus of Rs 101.09 billion in the review period.
Such surplus was Rs 14.43 billion in the same period of the previous year.
Net services income remained at a deficit of Rs 10.59 billion in the review period compared to a deficit of Rs 6.05 billion in the same period of the previous year.
Written by Sureis
This news first appeared on https://thehimalayantimes.com/business/remittance-inflows-surged-12-6pc-in-q1/ under the title “Remittance inflows surged 12.6pc in Q1”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.