Nepal had exported goods worth Rs 13 billion in the same period last year, posting a growth of over 35 percent.
Of the total exports, exports to third country mainly took the major beating and plummeted by 17 percent and exports to India, the largest market, too dropped by 13 percent, says a latest report of Nepal Rastra Bank (NRB).
“Decline in the export of woolen carpets, readymade garments, pulses, tanned skin and silverware and jewelries mainly dragged down the third country exports,” states the report. It attributes the decline in exports to India to the drop in exports of readymade garments, zinc sheet, thread, copper wire rod, and aluminum section, among others.
Buoyed by increased consumption, total imports, on the other hand, swelled by 20 percent and crossed over Rs 31 billion during the period.
Imports from India rose by 17.3 percent, while imports from other countries also soared by 24.2 percent during the period. Increased consumption of vehicles and spare parts, gold, MS wire and rods, electrical equipment, MS billet and medicines and parts, mainly contributed for the growth in imports.
Double-digit decline in exports and rise in imports caused the country´s trade to widen by about 34 percent and stand at Rs 47 billion.
Of the total trade deficit, deficit with India crossed over Rs 25 billion in the first two months, compared to some Rs 19 billion in the same period last year. Trade deficit with third countries too jumped over Rs 21 billion, widening by 41 percent over deficit recorded in the same period last year.
NRB report also notes that consumer inflation for the first two months of 2009/10 eased to 9.7 percent from 13.5 percent of the same period last year. However, this moderated inflation provided no relief to commoners because only the drop in prices of non-food items had dragged down the inflation figure. The prices of food items, however, soared by more than 16 percent during the period.
Of the major food items, the price of sugar and sugar-related products increased by 40.5 percent, pulses jumped up by about 26 percent and meat, fish and eggs too soared by 29 percent, the report states.
Despite poor industrial performance, slackening employment situation and high inflation, consumption continued to soar mainly because of the remittances. According to the central bank, Nepal received about Rs 35 billion in remittances from Nepali workers aboard. Remittance transfer grew by some 20 percent during the period over what the country received in the same period last year.
The average salary and wages in the country also rose by 20 percent during the period, thanks to increase in salary and allowance by the government this year.
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