A Widen­ing Trade Deficit

Southasia - - BRIEFING -

Nepal´s trade deficit has widened to Rs295.96 bil­lion with the share of im­ports stand­ing at 88.5 per cent of the to­tal trade dur­ing the first seven months of the cur­rent fis­cal year 2012/13. Trade deficit, how­ever, rose by 28.9 per cent due to an in­crease in im­ports of pe­tro­leum prod­ucts.

Ex­perts sug­gest that ris­ing im­port bills dur­ing grow­ing con­sump­tion in the coun­try and a de­crease in sup­ply were rea­sons be­hind the mount­ing trade deficit de­spite to­tal trade vol­ume in­creas­ing by 21.8 per­cent to Rs 384.36 bil­lion in the cur­rent fis­cal year.

Ac­cord­ing to the Trade and Ex­port Pro­mo­tion Cen­ter (TEPC), Nepal’s to­tal ex­ports in­creased by only 3.7 per cent to Rs44.2 bil­lion while to­tal im­ports in­creased by 24.7 per cent to Rs340.16 bil­lion. Nepal’s largest im­ports are pe­tro­leum prod­ucts that in­creased by over 22 per cent to Rs60.78 bil­lion dur­ing the re­view pe­riod. Fur­ther­more, Nepal’s sec­ond largest im­ports iron and steel prod­ucts were worth Rs34.12 bil­lion, show­ing an in­crease of 21.7 per cent. Al­though In­dia is Nepal’s largest trad­ing part­ner, the lat­ter’s ex­port to In­dia in­creased by a mea­ger 1.8 per cent which shows that Nepal has to tighten its trad­ing sec­tor to gen­er­ate rev­enue. It is in­ter­est­ing to note that im­ports to Nepal from In­dia in­creased by 26.9 per cent to Rs222.67 bil­lion.

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