Econ­omy sig­nals bad signs

People's Review - - FRONT PAGE - By Our Re­porter

The over­all bal­ance of pay­ment (BoP) of the coun­try has widened fur­ther dur­ing the first 10 months of cur­rent fis­cal year to Rs. 18.93 bil­lion. The BoP deficit was Rs. 14.93 in the first nine months of the cur­rent fis­cal year while it was in sur­plus of 53.81 bil­lion dur­ing the first 10 months of pre­vi­ous fis­cal year. The in­crease in the BoP deficit is due to the widen­ing cur­rent ac­count deficit which stood Rs. 191.02 bil­lion in the re­view pe­riod. It was Rs. 7.57 bil­lion in the same pe­riod of the pre­vi­ous year. The el­e­vated level of im­ports widened the cur­rent ac­count deficits, a re­port on cur­rent macroe­con­mic sit­u­a­tion of the coun­try pub­lished by Nepal Ras­tra Bank stated. Dur­ing the first 10 months of 2017/18, mer­chan­dise ex­port in­creased by 9.2 per cent to Rs. 66.65 bil­lion com­pared to an in­crease of 9.8 per cent in the same pe­riod the pre­vi­ous year. The growth in mer­chan­dise im­ports re­mained el­e­vated at 21.9 per cent to Rs. 985.83 bil­lion in the re­view pe­riod com­pared to an in­crease of 34.9 per cent in the same pe­riod the pre­vi­ous year. As a con­se­quence of sky­rock­et­ing level of im­port com­pared to ex­port, to­tal trade deficit widened by 22.9 per cent to Rs. 919.18 bil­lion in the first 10 months of 2017/18. The ex­port-im­port ra­tio de­clined to 6.8 per cent in the re­view pe­riod from 7.5 per cent in the cor­re­spond­ing pe­riod the pre­vi­ous year. The work­ers' re­mit­tances in­creased by 7 per cent to Rs. 606.68 bil­lion in the re­view pe­riod com­pared to a rise of 5.2 per cent in the same pe­riod a year ago. How­ever, net trans­fer re­ceipts de­creased 0.1 per cent to Rs. 692.23 bil­lion in the re­view pe­riod. Such re­ceipts had in­creased by 10.3 per cent in the same pe­riod last year. In the re­view pe­riod, the flow of for­eign di­rect in­vest­ment (FDI) amounted to Rs. 15.51 bil­lion com­pared to Rs. 11.61 bil­lion in the cor­re­spond­ing pe­riod last year. Sim­i­larly, the year on year (y-o-y) con­sumer price in­fla­tion which had peaked at 6 per cent in mid-March 2018 fur­ther de­cel­er­aed to 4.1 per cent in mid-May 2018 ow­ing to fall in the prices of some es­sen­tial items. A year ago, the y-o-y con­sumer price in­fla­tion rate was 3.4 per cent. Food in­fla­tion rose 3.2 per

cent in mid-May 2018 from 0.2 per cent a year ago. A surge in prices of veg­eta­bles, fruit, ghee and oil, milk prod­ucts and eggs, among others, con­tributed to the rise in food in­fla­tion in the re­view pe­riod com­pared to cor­re­spond­ing pe­riod last year, a re­port on cur­rent macro eco­nomic sit­u­a­tion of Nepal Ras­tra Bank made pub­lic to­day stated. Non-food in­fla­tion has mod­er­ated to 4.8 per cent in mid-May 2018 from 6.0 per cent a year ago. A slower growth in prices of clothes and footwear, hous­ing and util­i­ties, fur­nish­ing and house­hold equip­ment, among others ac­counted for a mod­er­a­tion in non-food in­fla­tion in the re­view month. The moun­tain re­gion wit­nessed rel­a­tively higher rate of in­fla­tion of 6.3 per cent fol­lowed by 5.7 per cent in the hill, 4.0 per cent in the Terai and 3.3 per cent in the Kathmandu Val­ley. In the cor­re­spond­ing pe­riod the pre­vi­ous year, these re­gions had wit­nessed in­fla­tion rates of 2.8 per cent, 4.0 per cent, 3.6 per cent and 1.9 per cent re­spec­tively.

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