Daily Times

KATHMANDU: Nepal’s trade deficit surged by 87.44 percent during the first five months of the current fiscal year that began in mid-July compared to same period last fiscal as imports increased substantially.

According to Department of Customs (DoC) of Nepal, Nepal witnessed trade deficit of 3.22 billion U.S. dollar during the first five months of this fiscal year 2016-17. Nepal imported goods worth 3.5 billion U.S. dollar during the period as imports surged by 78.26 percent compared to same period last fiscal year. On the other hand, the Himalayan country exported goods worth 280 million U.S. dollar, a rise by 14 percent on year on year basis. Both exports and imports declined during the same period last fiscal year as country faced Indian blockade for since September 2015 for four and half months. As usual, Nepal imported largest volume of goods from India and China, the two largest trading partners of the country. According to DoC, Nepal imported goods worth 2.3 billion U.S. dollar from India which is two third of Nepal’ total imports. From China, Nepal imported goods worth 500 million U.S. dollar. Experts said that the high level of trade deficit was the usual trend for Nepal’s economy over the last several years but the declining growth in remittance inflow which is mainly responsible to finance the surging imports, could lead the country to economic vulnerability. Purusottam Ojha, former commerce secretary of Nepal government told Xinhua that surging imports but static exports and declining remittance could lead to balance of payment crisis if effective measures are not taken to boost exports. According to Nepal Rastra Bank (NRB), the central bank of Nepal, remittance inflow in the country grew by 7.8 percent to 2.12 billion U.S. dollar during the first four months of the current fiscal year compared a growth of 19.4 percent in the corresponding period of the previous year. The decline in the growth of remittance inflow collaborates with decline in number of Nepalese migrant workers heading for foreign employment. During the first four months of this fiscal, outflow of Nepalese migrant workers declined by 7.9 percent, according to Department of Foreign Employment.