KATHMANDU, SEP 06 -
After about two years of continued deficit in balance of payment (BoP), the country is on its way to achieving a better BoP situation, thanks to deceleration in deficit growth of current account (sum of the balance of trade of good and services, foreign aid, and remittance).
The country’s BoP, which recorded a surplus for the first time in two years in the eleventh month of the last fiscal year, continued the trend in the twelfth month too with a surplus of Rs 2.93 billion. Nepal had witnessed a BoP surplus of Rs 249.1 million as of the eleventh month of the last fiscal year, according to Nepal Rastra Bank (NRB).
The figure is better than what the central bank had expected—a surplus of Rs 1 billion. The monetary policy for the last fiscal year had sought to attain a BoP surplus of Rs 7 billion, though.
The annual report of the country’s macro-economic situation prepared by the central bank stated that the BoP situation improved as the current account deficit shrank to Rs 11.91 billion from Rs 28.14 billion in the previous year. Growth in trade deficit also decelerated with export growing by 6.1 percent and import by just 5.5 percent.
The net transfer account (grant, pension, remittance and duty refund), which plays a significant role in the BoP figure, registered a growth of 8.9 percent to Rs. 307.86 billion compared to the previous year. The BoP had recorded a deficit of Rs 14.79 billion as of the ninth month.
“The country could have witnessed even better BoP situation had the last year’s budget been presented on time and the capital budget spent on time,” said a senior NRB official. “Transfer of foreign aid could not take place as expected due to low expenditure.”
According to NRB, foreign grants in cash increased by 3.9 percent to Rs 26.21 billion last year compared to Rs 25.23 billion a year ago. Likewise, the loan inflow stood at Rs 13.70 billion, double of that in the previous year.
Meanwhile, inflation remained at 9.6 percent which is exactly the same rate the country witnessed previous year. Despite high rise food prices, small rise in non-food items prices kept the figure under 10 percent.
Food and beverages items saw a price rise of 14.7 percent non-food item prices rose by 5.4 percent.
Source: ekantipur
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