KATHMANDU, Feb 23: Consumers paid less for items like cereal grains, vegetables, fruits, spices and communications services last month, as consumer price hike moderated to 6.8 percent in the period, latest macroeconomic report published by Nepal Rastra Bank (NRB) on Friday states.
Inflationary pressures eased in mid-Jan from 7.5 percent recorded in mid-Dec 2011 largely due to fall in food prices.
Prices of cereal grains and related products, which make a contribution of 14.81 percent to the country´s inflation basket, dropped 1.2 percent in mid-Jan as against the previous month. Prices of vegetables, which make up 5.65 percent of the inflation basket, also fell 15.9 percent in mid-January as against mid-Dec. Prices of other food items like spices also went down 1.1 percent, while communications costs dropped 0.2 percent.
Consumers, however, had to pay more on food items like ghee and oil, clothing and footwear items and transportation services. Prices of clothes and footwear, for instance, went up 4.8 percent in mid-January as against mid-December, while transport costs surged 6.4 percent and prices of ghee and oil hiked 3 percent during the period.
Total trade deficit in the first six months of the current fiscal year went up by 17.9 percent to Rs 180.77 billion as the country´s imports exceeded exports.
In the six months till mid-January, the country´s merchandise exports stood at Rs 35.92 billion, up 11.2 percent, over Rs 32.30 billion recorded in the same period last year. However, the country´s imports went up 16.8 percent to Rs 216.68 billion in the six-month period. Imports had dropped 0.1 percent to Rs 185.57 billion in the same period last year causing trade deficit to decline by 1.3 percent in that year.
Trade deficit with India, meanwhile, grew by 9.4 percent in first six months compared to a growth of 32.8 percent seen in the same period last year. Trade deficit with other countries surged 36.7 percent in the six-month period.
Continuing the trend of past two months, balance of payment (BoP) recorded a surplus of Rs 66.72 billion in the six-month period due to surge in remittance and tourism income. This is the highest ever BoP surplus reported since the central bank started keeping records of BoP. BoP reported a deficit of Rs. 4.26 billion, in the same period last fiscal year.
A 37.1 percent hike in remittance has been attributed to the BoP surplus. Nepal received remittance of Rs 162.37 billion from workers in the first six months. However, on a monthly basis, remittance inflows declined 2.7 percent in one month period to mid-January as against the previous month, according to the NRB report.
Meanwhile, tourism income rose by 29.5 percent during the first six months of the current fiscal year in contrast to a 18.2 percent decline reported in the previous year.
The gross foreign exchange reserves swelled 33.1 percent to Rs 362.13 billion in mid-January 2012 from a level of Rs 272.15 billion as at mid-July 2011. The reserves had shrunk 2.7 percent to Rs 261.64 billion in the same period last year. Considering the imports trend, the current level of reserves is sufficient for financing merchandise imports of 10.2 months, and merchandise and service imports of 9.1 months.