August 24: Nepal’s trade deficit declined by 10 percent in the first month of the current fiscal year as compared to the corresponding period of last fiscal year.

It is believed that the imports have declined due to the policy adopted by the government to discourage imports in addition to liquidity crisis faced by the banks and financial institutions and rising inflation.

According to the data released by the Department of Customs on Tuesday, the country’s imports declined by 13 percent in the first month of the current fiscal year (mid-July to mid-August).  

The country imported goods worth Rs 131.28 billion in the review month against the total import of Rs 150.73 billion in the corresponding period of last year.  

Meanwhile, the export of goods from Nepal also declined by 28.68 percent in the month of Shrawn (mid-July to mid-August).  

As per the data of the Department of Customs, the country exported goods worth Rs 14.81 billion in the review month against exports worth Rs 20.76 billion in the same period of the last fiscal year.    

The country’s trade deficit declined basically due to the decline in imports.

The trade deficit in the first month of the current fiscal year stands at Rs 116. 47 billion against Rs 129.96 during the corresponding period of last FY.

The Nepal Rastra Bank had adopted a policy to discourage imports during last winter after excessive imports led to a rise in Balance of Payments and also caused a decline in foreign exchange reserves.

Subsequently, the government banned the imports of ten luxury items such as costly vehicles for private use, readymade liquor, expensive mobile phones and television sets, toys, playing cards and snacks such as Kurkure and Lays as well as high-capacity motorbikes. The bank will remain in force till mid-August.

It is estimated that the imports have declined after banks stopped credit flow for import of goods amid liquidity crisis.

The Department of Customs informed that the government collected revenue of Rs 31.96 billion in the first month of the current FY through customs duty.

The consumption of diesel, which is one of the top imported items of the country, declined significantly in recent months. The country had imported 94,104 kilolitres of diesel during the first month of the last fiscal year, which declined to 65,186 kilolitres this year. The import of petrol also dropped to 54,704 kilolitres in the review month from 58,556 kilolitres during the corresponding period of last FY.

Although the import of petroleum products declined significantly in the review month, there has been a significant rise in the amount spent for the import of fuel due to price hike.

The country spent Rs 6.64 for the import of diesel during the first month of last fiscal year which rose to Rs 8.98 this year.