Budget deficit continues to increase

The government's budget deficit has reached well over Rs 5 billion in the current fiscal year due to unprecedented increase in expenditure in the non-development sector.

According to the latest report published by Nepal Rastra Bank, the national bank of the country, government expenditure in the last nine months has increased by 31.5 percent compared to 13.3 percent in the same period last year.

The government has generated around Rs 13.3 billion loan from internal sources and Rs 2.77 billion from external sources.

The bank said increase in non budgetary expenditure and conflict management led to the increase in the current expenditure that reached nearly Rs 58 billion.

Consumer inflation stood at 8.9 percent in mid-April 2008 compared to 5.6 per cent in the same period last year, driven by the significant rise of 12.6 per cent in prices of food and beverages in the review period.

Country also faced declining merchandise export until the end of third quarter. Total exports went down by 2.6 per cent, which was 2.9 per cent last year.

Despite the negative indicators in other economic sectors, overall Balance of Payment (BoP) posted a surplus of Rs 13.68 billion, NRB report says. nepalnews.com ia June 05 08