The country continued to witness sluggish growth in remittance in the fifth month, as in the previous months of this fiscal 2014-15, with a mere 2.7 per cent increase compared to the corresponding period of the previous fiscal.

The country received remittance worth Rs 227.20 billion in the review period, according to Nepal Rastra Bank’s recent macro-economic situation report. As remittance has been established as the major source for financing imports since long, its stagnant growth is a matter of anxiety among policymakers.

The country had received Rs 221.18 billion in remittance in the first five months of the last fiscal 2013-14, a growth of 35.3 per cent compared to the corresponding period of fiscal 2012-13.

A decelerated growth of remittance inflow has adversely affected the balance of payment (BoP) situation of the country. Though the country had BoP surplus of Rs 23.35 billion during the review period, the amount is nearly three times lower than that of the same period of previous 
fiscal when it stood at Rs 68.02 billion.

As per the central bank’s report, the country registered current account surplus of Rs 3.61 billion in the review period against a deficit in the previous month. “The low level of surplus in the current account is due to high growth of merchandise and services imports, decrease in grants and slow growth of workers’ remittance,” said the central bank’s report.

The country imported goods worth Rs 318.52 billion against exports of Rs 36.91 billion and trade deficit stood at Rs 281.61 billion in the review period. Export decreased by 1.2 per cent whereas import increased by 17.8 per cent.

  Macroeconomic update
 

Likewise, inflation based on consumer price index slipped by 0.2 percentage point than the previous month to seven per cent in the review period. It stood at 10.3 per cent in the corresponding period of the previous fiscal.

Published on: 18 January 2015 | The Himalayan Times