Consumer prices up 7.5%, trade deficit posts hike of 18.4%

KATHMANDU, May 23: Inflation shot past the government´s annual target of seven percent to hit 7.5 percent in mid-April, as prices of non-food items ranging from apparels and footwear to furnishing and household equipment went up, bucking past trends when food prices used to determine movement of consumer price index.



The latest macroeconomic report of Nepal Rastra Bank (NRB) shows prices of non-food went up by 10.1 percent last month as against 4.6-percent rise reported by food items.[brak]



Among non-food items, transport sector recorded the sharpest hike with costs going up by 17.8 percent. Prices of apparels and footwear also went up by 15.1 percent, while prices of furnishing and household equipment rose by 13.6 percent.



The report also shows vegetables prices going up by 10.9 percent last month, while prices of milk products and eggs had jumped 12.5 percent. Prices of other food products like ghee and oil had also gone up by 15.6 percent, and fruit prices had risen by 7.5 percent.



BoP



The overall balance of payment (BoP) registered its highest ever surplus of Rs 91.37 billion during the nine months of the current fiscal year, compared to a deficit of Rs 14.94 billion recorded in the same period last year.



The BoP has been setting new records since the last few months because of hike in workers´ remittance and tourism income. Workers´ remittances went up by 36.5 percent to Rs 248.18 billion in the nine-month period to mid-April, while tourism income rose by 28.9 percent in the review period.



Trade



Total trade deficit during the nine-month period went up by 18.4 percent to Rs 284.6 billion, as imports surpassed exports.



During the period, merchandise imports went up 18 percent to Rs. 339.84 billion, with imports from India posting a hike of 13.1 percent, while imports from other countries witnessing a rise of 28.3 percent.



The NRB statistics shows more petroleum products, coal, readymade garments, chemical fertilizer and M.S. wires, rods, coils and bars, were ferried in from India during the review period, while goods such as gold, crude soybean oil, edible oil, silver and other machinery and parts, among others, were imported from other countries.



On exports, merchandise exports rose 15.9 percent to Rs 55.24 billion during the period, with exports to India reporting a hike of 18.4 percent, while exports to other countries recording a growth of 11.1 percent.



Data shows exports to India mainly consisted textiles, polyester yarn, cardamom, copper wire rod and G.I. pipe, among others, while exports to other countries comprised of woolen carpets, readymade garments, pashmina, tanned skin and Nepali paper and paper products, among others.

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