The coronavirus pandemic has led to the fall in Nepal’s trade deficit by 16.43% in the first 11 months of the current FY 2020/21, compared to the same period in FY 2019/20.
According to the Customs Department, the trade deficit during the review period stood at NPR 1.01 trillion after the imports dipped by 15.31%.
The trade movement restriction due to the nationwide lockdown has led to a decrease in the country’s import expense to NPR 1.10 trillion in the current fiscal from NPR 1.29 trillion in the last fiscal.
The massive decline in economic activities took down gasoline import to NPR 142.34 billion from NPR 188.20 billion in the first 11 months.
Despite a drastic fall in the import value, the export earnings grew nominally by 0.19% and stood at NPR 88 billion.
In the current FY, Nepal has imported goods worth NPR 670.59 billion from India, the country’s largest trading partner. Meanwhile, the export earnings from India stood at NPR 62.95 billion, almost one-tenth of the import expenses.
In the last fiscal, the gap between the country’s export earnings and import expenses was negative NPR 1.21 trillion.
After a sharp drop in remittance inflow in the month of Chaitra, there has been a slight increase in inflows to Nepal as the foreign countries ease lockdown restrictions and restart economic activities.
According to Nepal Rastra Bank, the nation received remittances worth NPR 34.5 billion in Chaitra (mid-March to mid-April), compared to NPR 71 billion in the same period last fiscal.
However, the remittances improved to NPR 53.9 billion during mid-April to mid-May and NPR 62 billion during mid-May to mid-June.
“Major reasons behind the surge in remittance after mid-April may be relaxations in lockdowns in the host countries, and some may also have sent home money that they had failed to during the lockdown,” said Gunakar Bhatta, spokesperson for the central bank.
As of the first 10 months of the current FY, the country’s foreign exchange reserves stand at NPR 1.23 trillion.
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