Trade deficit narrows 3.1% to Rs 579 billion

KATHMANDU: Nepal’s total trade deficit fell by 3.1% to Rs 579 billion over the first five months of the current fiscal year.

The Current Macroeconomic Situation Report released by the Nepal Rastra Bank (NRB) on Friday shows Nepal’s merchandise exports saw a decline of 6.1% to Rs 63.21 billion in the first five months of 2023/24. This represents a significant improvement compared to the previous fiscal year when exports plummeted by 34.6%.

While exports to India contracted by 11.3% in the review period, there was a notable surge in exports to China, registering an impressive 322.3% increase, while exports to other countries grew by 2.3%.

Exports of zinc sheet, particle board, juice, polyester yarn & thread, and readymade garments experienced growth, while palm oil, soybean oil, tea, woolen carpets, and rosin faced a decline over the first five months of the current fiscal year. On the import front, merchandise imports decreased by 3.4% to Rs. 642.21 billion. While imports from China increased by 32.8%,  imports from India and other countries fell by 1.3% and 28.4%, respectively.

According to the report, imports of readymade garments, M.S. wire rod, bars, and coils, electrical equipment, textiles, and aircraft spare parts increased, while gold, crude soybean oil, crude palm oil, petroleum products, and rice/paddy imports fell.

Intermediate and final consumption goods accounted for 55.5% and 44.3% of total exports, respectively. On the imports side, intermediate goods comprised 49.1%, capital goods 8.6%, and final consumption goods 42.3%.