Inflation hits 10.4 percent

KATHMANDU, Jan 12: Prices of major consumer products went up by 10.4 percent in the first five months of current fiscal year ended mid-December.



Nepal Rastra Bank (NRB), the central bank, in its latest macroeconomic report released on Friday, stated that prices of food and beverage items saw a hike of 8.7 percent, while prices of non-food items increased by 11.8 percent in the review period. [break]



Under the food and beverage group, prices of ghee and oil recorded the highest increment of 18.7 percent in the review period. Under the non-food and services group, prices of furnishing and household equipment increased by 15.6 percent, the highest under the non-food group.



In its report, the NRB also stated that trade deficit widened by 30.3 percent to Rs 192.52 billion during the five-month period with significant rise in the trade deficit with India, the country´s largest trade partner. The total trade deficit had expanded by 16.3 percent last year.



Trade deficit with India further expanded by 33.7 percent in the review period, from 6.7 percent reported during the same period last year.



However, trade deficit with other countries eased to 24.6 percent in the five-month period from whopping 37 percent recorded in the same period last year.



During the review period, total exports from Nepal went up by 9.4 percent to Rs 32.88 billion. Exports to India, however, went up by marginal 4.2 percent during the period compared to 14.4 percent recorded last year. However, exports to other countries increased by 19.3 percent.



Imports, on the other hand, surged by 28.8 percent to Rs 225.39 billion during the period mainly because of significant rise in imports from the southern neighbor and other trade partners.



“Total imports increased during the review period largely due to sharp hike in imports from both India and other countries,” NRB report said.



According to the report, imports from India surged by 28.6 percent during the review period, compared to a rise of 8.1 percent recorded in the same period last year.



“Imports from India increased owing to an increase in imports of petroleum products, vehicles, spare parts, cement, chemical fertilizers and rice, among others,” said the report.



However, growth rate of imports from other countries declined compared to that of last year.



Imports from other countries rose by 23.7 percent compared to 30.9 percent during the same period of last year.



The double digit rise in imports from other countries was attributed to rise in the imports of pipe and pipe fittings, readymade garments, telecommunication equipment parts, edible oil and gold, among others.



During the period, balance of payment recorded a surplus of Rs 1.6 billion, sharply down from a surplus of Rs 61.19 billion in the corresponding period last year. Similarly, current account posted a surplus of Rs 1.64 billion in the review period, down from a surplus of Rs 24.89 billion recorded in the same period last year.

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