COVID-19 Crisis: Nepal Inflation at 5.83%, Remittance Down By 6.1%

Nepal’s Balance of Payment (BoP) has witnessed a surplus of NPR 120.90 billion in the first ten months of the FY 2019/20, meaning that outflow of money from the country is lower than what the country is earning.

The Current Microeconomic and Financial Situation of Nepal (of first 10 months of FY 2019/20) made public by Nepal Rastra Bank (NRB) revealed that the BoP was in deficit by NPR 600.2 million in the same period last fiscal.

Foreign remittances, the main source of foreign exchange for the country, has declined by 6.1% to stand at NPR 0.68 trillion in the aforementioned period.

The coronavirus pandemic has led to the negative growth rate of foreign remittances.

According to the Central Bank, the remittance inflow had increased by 19.6% in the corresponding period last fiscal.

Meanwhile, the inflation rate stood at 5.83% in the first ten months, down from 6.74% in the first nine months of the current fiscal year.

• Food and beverage inflation stood at 8.66%
• Imports declined by 13%
• Exports increased by 4.5%

Nepal Inflation Rate from 1984 to 2020

Source: Statista

The NRB has also revealed that Current Account loss stood at NPR 105.7 billion in the current FY, while it was NPR 221.7 billion in the last fiscal.

Meanwhile, the foreign exchange reserves stood at NPR 1.235 trillion by 13 May 2020, up by 18.9% from 1.038 trillion by 16 July 2019.

According to the Central Bank, the reserves can support 10.8 months of imports of goods and services.

Other Stats Include

• Capital Transfer – NPR 12.490 billion in FY 2019/20; NPR 13.480 billion in FY 2018/19
• Foreign Direct Investment (FID) – NPR 17.420 billion in FY 2019/20; NPR 9.470 billion in FY 2018/19

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