Trade deficit increases to Rs. 217 billion
Nepal’s trade deficit has increased alarmingly in the first month of the current fiscal year. According to Nepal Rastra Bank, trade defecit reached Rs. 217 billion by the second month of the current fiscal year. Nominal export compared to significant growth in import has led to the alarming trade defecit. According to the Annual Foreign Trade Statistic of the Department of Customs, Nepal imported goods worth Rs. 232.34 billion while exported goods worth only of Rs. 14.69 billion during the review period. Import rose by 42.59 per cent while export increased only by 8.03 per cent. In the review period, the country's foreign trade has increased by 39.93 per cent to Rs. 247.04 billion. Nepal's highest trade deficit is with India followed by China during the review period. India has been the major trading partner of Nepal. Nepal's trade deficit with India has reached Rs. 137.89 billion, with China Rs. 28.78 billion and with France Rs. 12.78 billion. During the review period, Nepal imported goods worth Rs. 146.22 billion from India while it exported goods worth only Rs. 8.32 billion. Likewise, Nepal exported goods worth Rs. 351 million to China and imported goods worth Rs. 29.13 billion. The country imported goods worth Rs. 12.96 billion from France while it exported goods worth Rs. 182 million to the European country. Likewise, Nepal's trade deficit with United Arab Emirates has reached Rs. 4.98 billion, with Switzerland Rs. 2.78 billion,
with Canada Rs. 2.55 billion and with Thailand Rs. 2.58 billion. Likewise, the year-on-year (y-o-y) consumer price inflation increased to 4.2 per cent in mid-August 2018 from 2.3 per cent a year ago. The increase in the price of food and beverage group contributed to a rise in overall inflation in the review period, according to a current macroeconomic and financial situation report published by Nepal Rastra Bank (NRB). The y-o-y inflation of food and beverage group rose to 2.9 per cent in mid-August 2018 as against the decline of 1 per cent a year ago. A surge in prices of vegetables, tobacco products, cereals grains and their products among others mainly contributed to a rise in food inflation in the review period. Non-food and service inflation increased to 5.2 per cent in mid-August 2018 from 4.9 per cent a year ago. Region-wise, the Hilly region witnessed relatively higher rate of inflation of 5.3 per cent followed by 4.1 per cent in the Terai, 3.5 per cent in the Kathmandu Valley and 2.7 per cent in Mountain. The y-o-y wholesale price inflation stood at 6.3 per cent in mid-August 2018 compared to 1.2 per cent a year ago. Due to the surge in the prices of petroleum products, basic metals, textiles, wooden products, among others, the wholesale price inflation in the review period remained higher compared to the same period of the previous year.