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Kathmandu Wednesday January 02, 2002 Paush 18, 2058.
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Govt expenses rise, trade deficit widens
Post Report
KATHMANDU, Jan 1 :The budget operation of the
government, during the first four months of the fiscal year 2001/02, weakens as the total
expenditure registered a growth of 9.0 per cent amounting to Rs 18.76 billion against an
increase of 5.4 per cent during same period last year.
Of the total government expenditure, regular
expense grew by 6.9 per cent to touch Rs 13.77 billion while cash development expenditure
registered an increment of 5.9 per cent to touch Rs 3.50 billion while freeze expenditure
surged by 45.8 per cent to Rs 1.48 billion. This is stated in a press communiqué released
by the Nepal Rastra Bank (NRB) today.
The late release of government expenditure as
a consequence of delay in budget approval coupled with the slackness seen in development
activities as a result of disturbed law and order situation is attributed for the slower
growth in development expenditure.
Similarly, revenue collection, the major
resource to finance the budget, increased by 7.0 per cent to Rs 14.55 billion whereas such
growth during the same period last year was 31.3 per cent. The deceleration in revenue
collection is attributed to a decline in imports and sluggish industrial production
situation.
The decline in foreign cash grants and
slowdown in revenue collection resulted in a higher budgetary deficit of Rs 4.20 billion
compared to a deficit of Rs 3.61 billion last year. The government, during the period,
overdrew Rs 2.67 billion from the central bank to finance the resources gap.
The national Urban Consumer Price Index, on
point to point basis, increased by 2.8 per cent which is similar to the growth during the
corresponding period last year.
According to the release, of the over all
price index, price of food and beverages rose by 4.7 per cent compared to a decline of 3.7
per cent the previous year. Despite a decline in the price of rice and rice products, a
sharp rise in the prices of vegetables and fruits sugar and related products, and oil and
ghee is attributed to the rise in the prices of food and beverages group.
However, the price of non-food and services
group went up by 0.6 per cent during the first four months as against the growth of 10.9
per cent in the same period of the last fiscal year, states the release. The downfall in
the housing prices is the main reason behind the nominal price rise in the non-food group.
During the review period, total exports
registered a decline of 8.3 per cent to Rs 17.58 billion compared to a growth of 42.3 per
cent during the corresponding period of the previous financial year.
The growth of exports to India decelerated to
324.3 per cent from 57.9 per cent in the same period of the previous year. The exports to
third countries also plunged by 34.9 per cent as against a growth of 31,6 per cent during
the same period of the last fiscal year.
The export of jewelry and tanned skin to the
third countries increased during the period, however, a heavy slump in the exports of
woolen carpet, garment and pashmina, pulses dragged down the whole export figure.
During the first four months of the current
fiscal year, imports registered a decelerated growth of 3.5 per cent to Rs 34.37 billion
as against a growth of 12.5 per cent during the same period of the last fiscal year.
The import of animal, cement, electrical
equipment, medicine, petroleum products, tobacco, pesticides, tyre, tube and chemical
fertilizer from India went up. Similarly petroleum products, agricultural tools, medical
equipment, electrical equipment, crude oil, medicine, polythene granules, copper wire and
sheet, paper as well as silver from the third countries rose in comparison to that of the
previous year.
As a result of increase in imports and
decline in exports, trade deficit widened by 2.1 per cent to Rs 16.79 billion whereas such
figure had declined by 9.5 per cent during the same period last year. The export/import
ratio, which was 53.8 per cent in the previous fiscal year, came down to 51.1 per cent in
the review period, states the release.
Based on the available balance of payments
statistics for the first two months of the fiscal year, the balance of payments remained
favorable by Rs 0.87 billion. During the period, in spite of decline in net service
income, current account deficit narrowed down by 3.8 per cent to Rs 2.56 billion due
mainly to an increase in net transfer receipts compared to the corresponding period of the
previous year. Besides, an inflow of miscellaneous capital items helped the balance of
payments to remain positive.
The foreign exchange holdings of the banking
system increased by 3.0 per cent to Rs 104.13 billion in mid-November 2001. Of the total
reserve, 74.6 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 increased to Rs 42.6 billion in mid-November 2001 from Rs 39.3 billion in the
previous month. Similarly, Nepal Stock Exchange (NEPSE) share price index increased from
281.2 in the previous month to 300.2 in mid-November 2001.
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