Imports up 1.1%, exports down by 5.1%

KATHMANDU: Nepal’s merchandise exports dropped by 5.1% to Rs 25.09 billion during the first two months of the fiscal year 2024/25.

According to the Current Macroeconomic Situation Report released by the Nepal Rastra Bank on Tuesday, this decline is a slight improvement compared to the 7.8% drop in the same period of the previous fiscal year. Destination-wise, exports to India, China, and other countries fell by 4.5%, 45.3%, and 3.9 percent, respectively.

Among export commodities, tea, particle board, oil cakes, shoes, sandals and soybean oil saw an increase, while significant declines were recorded in the export of cardamom, zinc sheets, palm oil, readymade garments and medicinal herbs.

In contrast, merchandise imports rose by 1.1% to Rs 262.54 billion, compared to a 5.1% decrease during the same period last year. Imports from India and other countries fell by 0.1% and 5.1%, respectively, while imports from China surged by 11.9%. Imports of transport equipment, vehicle spare parts, edible oil, chemical fertilizers, telecommunication equipment and garlic increased in the review period. On the other hand, imports of gold, MS billet, rice/paddy, crude palm oil, and electrical equipment decreased.

The total trade deficit for the two-month period grew by 1.8% reaching Rs 237.45 billion. This marks a reversal from the 4.7% decrease seen during the same period last year.

One notable trend is the reduction in imports from India paid for in convertible foreign currency, which amounted to Rs. 29.93 billion during the review period, down from Rs. 32.14 billion in the corresponding period last year.

In terms of the composition of foreign trade, intermediate goods made up 53.2% of total exports, while final consumption goods accounted for 45.6% and capital goods were a negligible 1.2%. On the imports side, intermediate goods made up 49.7%, capital goods 8.6% and final consumption goods 41.8% of total imports.