According to Nepal Rastra Bank´s (NRB´s) latest report, remittance receipt of the country grew at higher rate of 10.4 percent and dragged down balance of payment (BoP) deficit nominally to Rs 19.59 billion, even though trade deficit widened further during the period. [break]
"Remittance growth rate bounced back to double digit figure and touched Rs 86.74 billion," states the report. Pension transfers of ex-Gurkhas too grew by more than three-fold to over Rs 12 billion, helping the country push back the looming crisis during the period.
But country´s exports continued its dismal performance and recorded a decline of 18.7 percent to Rs 25.11 billion, whereas imports continued to bloat, growing still at a higher rate of 32.8 percent to Rs 153.39 billion. As a result, country´s trade deficit widened at a sharper rate of 51.7 percent than the past months to Rs 128.27 billion.
During the period, gold imports almost tripled to over Rs 25.54 billion, vehicles and spare parts import jumped about two-fold to over Rs 10 billion and M S billet -- raw material of steel industry -- grew three-fold to over Rs 6.63 billion.
However, given that gold imports have almost come to a standstill and vehicles imports on month-to-month basis to have dropped almost to half, concerned officials said the growth reflected in the fifth month of the fiscal year is not a matter to worry now.
Owing to the huge BoP deficit, nonetheless, country´s gross foreign exchange holding declined by 12.2 percent at Rs 245.94 billion in mid-December 2009, compared to mid-July.
Though government´s steps showed some initial positive impact towards stability on the external front, indicators suggest it has failed to attain similar success on internal stability.
Mainly consumer inflation, which had dropped to single digit for the first four months, jumped back to double digit of 11.3 percent in mid-December 2009.
Food prices rose by higher rate of 17.8 percent and non-food and services prices too rose at higher rate of 3.7 percent, compared to previous months.
Of the food items, price of sugar and sugar related products surged by 56.9 percent, vegetables too increased by 39.3 percent. NRB report further states that fruits, pulses and meat, fish and eggs prices also increased by 34.6 percent, 28.4 and 21.9 percent respectively during the month.
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