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NRB REPORT |
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NRB REPORT |
Mixed Signals The financial trends of the
first nine months of the current fiscal year paint a mixed icture By SANJAYA DHAKAL Nepal Rastra Bank's latest diagnosis of the
financial health of the nation has come up with some startling results. After a lull for a
long time, inflation is again picking up. The statistics of the report give more
reasons to worry than cheer. While inflation is hitting the roof and export-import trends
are not too promising, remittances are steadily on the rise, holding the economy together. The report about the financial situation in
the first nine months of the current fiscal year (2059/60) paints a bleak picture
regarding the spiraling inflation. It states that the rise in the prices of essential
commodities like oil, ghee, vegetables, fruits, foodstuffs, meat products, milk products
triggered the inflation. During the review period the national urban consumer price index
rose by 8.1 percent and compared to 2.4 percent growth last year.
The report states that there have
been mixed changes in the status of foreign trade, foreign exchange reserves, revenue and
loan outflow to private sector in the same period. The development expenditure continued
to fall by alarming rate leading to increase in budget deficit. The total government
expenditure came down by 2.6 percent against a rise of 3 percent last year. Of this, the
regular expenditure increased by 8 percent whereas the development expenditure declined
sharply by 31,7 percent, the report states. Interestingly, the Balance of Payment (BoP)
continued to show a healthy growth owing to increasing remittances from Nepalese working
overseas. The report stated that the BoP registered the surplus of Rs.8 billion. The trade deficit further widened with the
15 percent increase in imports, whereas the exports grew by mere one percent, compared to
the same period of previous fiscal year. The deficit widened by 27.3 percent to Rs.53.8
billion compared to 4.2 percent decline in the previous fiscal year. The total imports
increased to Rs.91.4 billion. It had declined by 8 percent in the same period previous
fiscal year. The total exports, however, rose by 1 percent to reach Rs.37.6 billion as
against 12 percent decline last year. The exports to India declined by 7.9 percent to
reach Rs.21 billion compared to 20.2 percent rise last year. But the exports to the third
countries increased by 15.2 percent to reach Rs.14.7 billion as against 38.4 percent
decline last year. The gross foreign exchange reserve of the
banking sector reached to Rs.115 billion till the end of the review period. This reserve
is enough to finance merchandise imports for 11 months and merchandise and service imports
for 9 months. The stock exchange transactions in terms of
value, declined. The market capitalization of the listed companies went up by 7.3 percent
to Rs.35.3 billion. Revenue collection went up by 7 percent to
Rs.36.7 billion compared to the growth of 4.5 percent last year. Foreign grants shrank by
40.9 percent against the rise of 19.7 percent last year. As the country is shortly entering into a
new fiscal year and the government is preparing the new budget, the latest report of the
financial state could provide significant insight to the new finance minister who will
take the charge. "The new finance minister is going to
have a lot of difficulties. Although there is not much time left, the new minister will
indeed make some changes in the budget proposal if only to show his level of
intelligence," Dr. Bishwombher Pyakuryal, a renowned economist, recently told a
television program. He also said that despite more than four months of cease-fire in
effect in the country, the development expenditure could not take off pointing to lack of
effectiveness on the part of the government. |
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editor: spotligh@mos.com.np |
