December 25: The imports of Nepal in the first five months of the current fiscal year has been less than the imports in the corresponding period of last fiscal year when the government had restricted imports of luxurious goods.

This indicates that there is lack of demand in the market and the government has failed to revitalize the economy despite efforts from the central bank and the federal government.

From mid-July to mid-December last year, Nepal had imported goods worth more than Rs 664 billion which fell to Rs 642 billion in the current fiscal year.

Nepal’s import expenses fell 3.39 percent in the first five months of the current fiscal year compared to the same period of last year.

The government has imposed a restrictions on the imports of ten luxury goods from April 26, 2022 to August 31 this year.

As a result, cars except ambulances, all types of readymade alcohol except industrial raw materials, motorcycles with capacity of more than 150 cc and smartphones worth more than USD 300, foods such as chips, color televisions larger than 32 inches, playing cards, diamonds, cigarettes and tobacco products and all kinds of toys were restru=icted during that period.

After August 31, the import ban on food items like chips, color televisions larger than 32 inches, playing cards, diamonds, cigarettes and tobacco products and all types of toys was lifted.

The import ban on the remaining items was still in place until mid-December. Customs data has confirmed that the lifting of the ban on the import of the remaining four items from mid-December has had little effect in easing imports.

Two years ago, at this time, the policy makers were focused on reducing imports due to the declining foreign exchange reserves. However, businessmen had raised concerns that such a move would curb economic activities and that would lead to the decline in overall economic growth.

Although both import and export have increased in the Nepali month of Mangsir (mid-November to mid-December) compared to the previous month, it does not hold much significance because there were long holidays in the month of Kartik (mid-October to mid-November) due to Dashain and Tihar.

Government offices and banks and financial institutions were open only for 16 days in the festive season.

According to the data released by the Department of Customs, Nepal Rs  129.70 billion in the month of Mangsir (mid-November to mid-December), while the export figures stood at Rs  12.64 billion.

In the month of Kartik, Nepal imported goods worth Rs 104.74 billion and exported goods equal to Rs 9.79 billion.

The records with the Department of Customs (DoC) show that the country’s trade deficit declined 3.09 percent during the first five months of the current fiscal year.

The central bank has already reduced the interest rate while reviewing the monetary policy saying that the situation in the external sector is strong. After that, banks are also emphasizing on providing loans by reducing interest rates.

As the foreign exchange reserves eased, the government opened import restrictions and Nepal Rastra Bank also reviewed its policy. According to the report of NRB, the total foreign exchange reserve is enough to cover imports of goods for 13.6 months and goods and services for 11.3 months.