Trade deficit surged five-fold in last decade

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Figures in Rs billion. Source: Department of Customs

Kathmandu, August 5

The country’s trade deficit jumped five folds in the last decade as imports have been skyrocketing and exports have slowed to a crawl in the review period.

According to the annual trade statistics of last fiscal 2017-18, unveiled by the Department of Customs today, the country imported goods worth Rs 1,243.29 billion against exports worth Rs 81.19 billion which has resulted in a trade deficit of Rs 1,162.10 billion in the last fiscal. Compared to the previous fiscal, import growth stood at 26.31 per cent while export growth was a meagre 11.17 per cent and consequently trade deficit jumped by a whopping 27.5 per cent, according to DoC.

The trade gap has widened unsustainably in the last 10 years by five folds until 2017-18 to Rs 1,162.10 billion as compared to Rs 222.4 billion in fiscal 2008-09, which has posed multiple risks in the country’s economy. Supply side constraints also known as low production has been hindering export sector growth. The country’s target to raise exports to above Rs 100 billion, which was set some five years back, is still a far-fetched notion. The country’s exports increased by just 18.35 per cent in the last 10 years to Rs 81.19 billion, shows the DoC data.

“We can say that export growth has retarded if we compare export growth with the depreciation of the Nepali currency,” said Purushottam Ojha, former commerce secretary. “Nepali currency vis-à-vis the US dollar has depreciated by 56.5 per cent.”

Imports have skyrocketed in last decade. Volume of imports was at Rs 291 billion in 2008-09, which has skyrocketed to Rs 1,243.29 billion in 2017-18. Exports used to cover 23.6 per cent of the imports till 2008-09, however, it now covers only 6.5 per cent of total imports.

A decade back, in fiscal 2008-09, the country used to import goods worth four rupees for export worth every rupee. However, export to import ratio stood at 1:15 in fiscal 2017-18, which means the country imported goods worth Rs 15 against export of every single rupee.

The major imports of the country are fuel, iron and steel, machines and machinery parts, vehicles and electronic goods, as per DoC.

In the previous fiscal, the country imported fuel worth Rs 197.85 billion, iron and steel worth Rs 125.88 billion, machine and machinery parts worth Rs 124.44 billion, vehicles worth Rs 86.3 billion and electronic goods worth Rs 78.28 billion, as per DoC.

Likewise, major exports in previous fiscal were coffee and tea worth Rs 9.2 billion, yarn (Rs 8.43 billion), carpets (Rs 7.38 billion), readymade garments (Rs 6.28 billion) and iron and steel worth Rs 5.16 billion, according to DoC.

Written by Sandeep
This news first appeared on https://thehimalayantimes.com/business/trade-deficit-surged-five-fold-in-last-decade/ under the title “Trade deficit surged five-fold in last decade”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.