Nepal Rastra Bank (NRB ) stated this in a report of the Current Macroeconomic Situation of Nepal based on the three months´ data of FY 2012/13 which it released on Tuesday.[break]
NRB states that these indices had increased by 9.6 percent and 8.2 percent respectively in the corresponding period of previous year.
Similarly, region-wise, the price indices increased by 11.1 percent in Hills followed by 10.8 percent in Terai and 9.7 percent in Kathmandu Valley during the review period. The respective increments were 10.0 percent, 9.3 percent and 7.5 percent in the corresponding period of the previous year, NRB stated in its report.
The y-o-y wholesale price index increased by 10.2 percent during the review period compared to a rise of 6.1 percent in the corresponding period of the previous year. The wholesale price indices of imported commodities, agricultural commodities and domestic manufactured commodities increased by 11.6 percent, 10.6 percent and 6.8 percent respectively during the review period. The respective increments of these sub-groups were 12.0 percent, 1.7 percent and 11.0 percent in the corresponding period of the previous year, the NRB stated in its report.
National Salary and Wage Rate
The y-o-y salary and wage rate index increased by 11.1 percent during the review period compared to an increase of 29.9 percent in the corresponding period of the previous year. Within the salary and wage rate index, there is no change in salary index compared to an increase of 19.3 percent in the corresponding period of the previous year. However, the wage rate index increased by 13.9 percent during the review period compared to an increase of 32.9 percent in the corresponding period of the previous year.
The indices of wages of industrial labourers, construction labourers and agricultural labourers increased by 19.9 percent, 12.3 percent and 8.0 percent respectively during the review period. These indices had increased by 23.5 percent, 36.5 percent and 37.3 percent respectively in the corresponding period of the previous year.
Government Revenue
NRB stated that during the review period, revenue mobilization of the Government of Nepal (GoN) grew by 31.1 percent to Rs. 57.45 billion. Such revenue had risen by 16.7 percent to Rs. 43.83 billion in the corresponding period of the previous year. Continue reforms in tax administration, control in tax evasion as well as an increase in import and consumption contributed to such an increase in the revenue mobilization.
Of the total revenue mobilization, VAT revenue grew by 17.1 percent to Rs. 19.59 billion during the review period. It had increased by 14.8 percent in the corresponding period of the previous year. The increase in VAT revenue was on account of growing imports and positive impact of leakages control in VAT including reform in VAT administration during review period.
During the review period, custom revenue rose by 44.6 percent to Rs. 13.79 billion compared to an increase of 14.8 percent in the corresponding period of the previous year. Increase in the imports including the imports of high tax yielding vehicles and spare parts contributed to such a growth of custom revenue during the review period.
Similarly, during the review period, excise revenue increased by 21.1 percent to Rs. 8.37 billion compared to an increase of 10.4 percent in the corresponding period of the previous year. Increase in the imports of high excise tax yielding vehicles and reforms in excise administration accounted for such a growth of excise revenue during the review period.
Income tax revenue increased by 40.5 percent to Rs. 7.92 billion during the review period. Such revenue had risen by 14.9 percent in the corresponding period of the previous year. Positive impact of reform in income tax administration and expansion on taxpayer education accounted for such an increase in income tax revenue during the review period.
35. During the review period, non-tax revenue increased by 62.3 percent to Rs. 5.20 billion compared to a increase of 83.7 percent in the corresponding period of the previous year.
Budget Deficit / Surplus
During the three months of 2012/13, government budget remained at a surplus of Rs. 10.94 billion. The budget surplus had stood at Rs. 2.47 billion in the corresponding period of the previous year. A high growth of resource mobilization relative to government expenditure accounted for such a budget surplus during the review period.
Government Expenditure
During the review period, total government spending increased by 13.4 percent to Rs. 53.29 billion compared to an increase of 5.2 percent in the corresponding period of the previous year. The total expenditure increased mainly on account of the significant rise in freeze expenditure.
Foreign Cash Loans and Grants
During the three months of 2012/13, foreign cash loans of Rs. 449.2 million and foreign cash grants of Rs. 3.66 billion were received by the GoN. The GoN had received foreign cash loans of Rs. 896.4 million and foreign cash grants of Rs. 5.71 billion in the corresponding period of the previous year.
Foreign Trade
The NRB report states that merchandise exports went up by 14.9 percent to Rs. 20.73 billion in the first three months of 2012/13. Such exports had increased by 8.1 percent to Rs. 18.04 billion during the same period of the previous year.
On a monthly basis, merchandise exports decreased marginally in September/October of the current fiscal year compared to that of the previous month.
Exports to India increased by 6.0 percent during the review period compared to an
increase of 12.9 percent in the previous year. Exports to other countries went up by 31.0 percent compared to a slight increase of 0.6 percent in the same period of the previous year. In USD terms, exports to other countries increased by 11.2 percent to USD 96.7 million in contrast to a decrease of 0.5 percent during the corresponding period of the previous year.
Imports from India went up by 36.0 percent during the review period compared to an increase of just 1.1 percent in the same period of the previous year. Imports from other countries increased by 36.3 percent compared to an increase of 21.9 percent in the corresponding period of the previous year. In US dollar terms, imports from other countries increased by 15.5 percent to USD 566.8 million compared to an increase of 21.1 percent in the previous year. Imports from India increased primarily owing to an increase in the imports of petroleum products, M.S. billet, chemical fertilizer, cement and rice, among others. Likewise, the imports from other countries increased mainly on account of an increase in the imports of pipe and pipe fittings, telecommunication equipment parts, gold, readymade garments and edible oil, among others.
Total trade deficit during the first three months of 2012/13 surged by 40.8 percent to Rs. 115.75 billion compared to an increase of 7.6 percent during the same period of the previous year. Trade deficit with India increased by 42.7 percent during the review period in contrast to a decline by 1.2 percent in the same period of the previous year. Trade deficit with other countries increased by 37.5 percent compared to an increase of 27.7 percent during the same period of the previous year.
42. Due to high growth of imports, the ratio of export to import declined to 15.2 percent in the review period from 18.0 percent a year ago.
Balance of Payments Situation
The overall BOP recorded a surplus of Rs. 347.3 million during the first three months of 2012/13 compared to a surplus of Rs. 33.66 billion during the same period of the previous year. The current account posted a deficit of Rs. 2.94 billion in the review period in contrast to a surplus of Rs. 13.82 billion in the same period of the previous year. The deficit in the current account was primarily due to a substantial rise in the imports of merchandise and services. In US dollar terms, the overall BOP recorded a surplus of USD 2.1 million compared to a surplus of USD 447.1 million during the same period of the previous year. Similarly, the current account registered a deficit of USD 34.3 million in the review period in contrast to a surplus of USD 178.8 million during the corresponding period of the previous year.
Foreign Exchange Reserves
The gross foreign exchange reserves decreased by 2.2 percent to Rs. 429.95 billion in mid-October 2012 from a level of Rs. 439.46 billion as at mid-July 2012. Such reserves had increased by 19.4 percent to Rs. 324.97 billion in the same period of the previous year. Out of total reserves, NRB´s reserves declined by 5.0 percent to Rs. 356.93 billion in the review period from a level of Rs. 375.52 billion as at mid-July 2012.
The gross foreign exchange reserves in USD terms increased by 2.5 percent to USD 5.08 billion in mid-October 2012. Such reserves had decreased by 4.4 percent in the same period of the previous year. Likewise, during the first three months of 2012/13, the reserves in terms of inconvertible foreign exchange decreased by 3.8 percent to IRs 58.11 billion. Such reserves had increased by 29.3 percent during the same period of the previous year. On the basis of trend of import during the first three month of the current fiscal year, the current level of reserves is sufficient for financing merchandise imports of 9.7 months and merchandise and service imports of 8.2 months.
Price of Oil and Gold in the International Market and Exchange Rate Movement
NRB stated that the price of oil (Crude Oil Brent) in the international market increased by 0.6 percent to USD 115.00 per barrel in mid-October 2012 from USD 114.33 per barrel in mid-October 2011. Likewise, the price of gold increased by 4.1 percent to USD 1746.50 per ounce in mid-October 2012.
Nepalese currency vis-à-vis the US dollar appreciated by 4.7 percent in mid-October 2012 from the level of mid-July 2012. It had depreciated by 9.2 percent in the corresponding period of the previous year. The exchange rate of one US dollar stood at Rs. 84.60 in mid-October 2012 compared to Rs. 88.60 in mid-July 2012.
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