Government expenditure rises, trade deficit widens

Post Report

KATHMANDU, Oct 3 - During the first month of the current fiscal year, government expenditure went up by 80.3 per cent in contrast to a decline of 7.5 per cent during the first month of the previous fiscal year.

Of the total government expenditure, regular expense rose by 116.6 per cent and development expense by 241.8 and freeze expenditure by 58.6 per cent during the period, according to a press communiqué released by the Nepal Rastra Bank (NRB) today.

Pay hike of government employees in previous fiscal year, payment of overdue, pension and medical care allowance and a substantial increase in internal security mainly pushed the government expense up.

Similarly, revenue collection also increased by 57.9 per cent during the review period compared to a decline of 24.1 per cent during the corresponding period last year. But due to low mobilization of resources, a budget deficit of Rs 12 million was incurred during the first month of the current fiscal year.

The national Urban Consumer Price Index, on point to point basis, increased by 3.1 per cent during the month in contrast to an increment of 1.0 per cent during the same month last year. According to the release, of the over all price index, price of food and beverages rose by 1.7 per cent compared to a decline of 4.6 per cent the previous year.

However, the price of non-food and services group went up by 4.8 per cent during the first month of the fiscal year 2001/02 as against the growth of 8.2 per cent in the same month the previous fiscal year, states the release.

During the review period, exports registered a decelerated growth of 15.2 per cent to Rs 4494.3 million compared to a growth of 25.9 per cent during the corresponding period of the previous financial year.

The growth of exports to India decreased to 49.5 per cent from 95.3 per cent in the previous year whereas the exports to third countries plunged by 13.6 per cent as against a decline of 2.9 per cent during the first month of the last fiscal year.

However, the export of jewelry, woollen carpet and tanned skin to third countries increased, but the export of pulses, pashmina and ready-made garments plunged significantly during the review period.

There has been a marginal increase of 3.3 per cent in import during the first month of the current fiscal year amounting to Rs 8413.5 million compared to a rise of 12.2 per cent during the same period of the preceding fiscal year.

The imports of vehicles and parts, chemical fertilizers, petroleum products, M S billet, M S wire, rod, and pesticides from India and petroleum products betel nut, computer parts, camera, black pepper, PVC compound, steel sheet, medical equipment, paper and silver from the third countries went up in comparison to that of the previous year.

Trade deficit decreased by 7.6 per cent and remained at Rs 3919.2 million compared to a growth of 1.9 per cent in the same period of the previous year due to higher growth rate of exports than that of imports. The export/import ratio which was 47.9 per cent last fiscal year improved to 53.4 per cent during the first month of this fiscal year, states the release.

The balance of payments in the first eleven months of the previous fiscal year remained favourable by Rs 4279.9 million. In the first month of this fiscal year, in spite of decline in net services income, current account deficit plunged by 5.0 per cent, due mainly to decrease in trade deficit and increase in current transfer receipts compared to the corresponding period of the previous year.

A substantial inflow of official capital net helped to make the balance of payments positive. The overall balance of payments recorded a surplus of Rs 1172.8 million. Subsequently, foreign exchange holdings of the banking system increased by 9.2 per cent to Rs 106046.4 million. Of the total reserve, 75.5 per cent was accounted for by convertible currencies and the rest by non-convertible currency.

Market capitalization of the companies listed in the stock exchange decreased to Rs 43.96 billion in mid-August 2001 from Rs 46.35 billion in the previous month. Similarly, Nepal Stock Exchange (NEPSE) share price index decreased from 348.4 in the previous month to 322.1 in mid-August 2001.

New pharma company begins marketing

Post Report

KATHMANDU, Oct 3 – Quest Pharmaceutical, the latest pharmaceutical industry to enter into the domestic drug market, is launching its 22 various medicines in the market from Thursday.

The company established with the initial investment of Rs 35 million, aims to specialize in the psychotropic, anti-diabetes and cardio-vascular drugs.

Of the total 34 pharmaceutical factories under operation in the country, only very few companies are engaged in producing drugs related with heart diseases, psychiatry and diabetes, contributing one per cent of the total domestic demand.

"After our entry into the market, we expect that around 5 per cent of the demand would be fulfilled by the domestic companies," says Umesh L Shrestha, managing director of Quest Pharmaceuticals. He also informed that the factory would launch 30 more products within the coming year.

The company claims that it has installed modern and sophisticated plants and the quality of the drugs would be as good as the quality of any standard companies of the world.

"As per the international requirement prescribed by the World Health Organization (WHO) for the pharmaceutical industry, we have fully complied with the Good Manufacturing Practice (GMP),’ Shrestha added.

Pharmaceutical industry is one of the few success stories of Nepal. Once swamped completely by Indian and multi-national drug companies, the Nepali market today sustains 35 homegrown companies, which together have captured over 25 percent of the Rs 5 billion annual drugs market. The industry is also growing at double-digit rates annually.