Trade deficit exceeds annual budget size

By A Staff Reporter Kathmandu, June 24: Nepal’s trade deficit has reached Rs. 1,577.38 billion, more than the total fiscal budget of the country, in the first eleven months of the current fiscal year. Nepal’s total budget for the current fiscal year is Rs. 1,546 billion.

The Ministry of Finance had slashed the fiscal budget to Rs. 1,546 billion from Rs. 1,632.83 billion during the mid-term review.

According to the Foreign Trade Statistics of the Department of Customs, the country’s trade deficit has increased by 25 per cent to Rs. 1,577.38 billion in the first 11 months of the current fiscal year.

Low volume of export rather than rising import has resulted in a whopping trade deficit.

The import trade increased by 27.5 per cent to Rs. 1,763.22 billion during the review period, leading to the high trade deficit. In the same period of the last fiscal year, the country had imported goods worth Rs. 1,383.36 billion.

Although export trade also increased by 53.3 per cent to Rs. 185.83 billion during the first 11 months (mid-July 2021 to mid-June 2022) of the current fiscal year, the trade deficit has increased due to lower volume of export than import.

Nepal had exported goods worth Rs. 121.25 billion in the same period last fiscal year.

According to the statistics, total foreign trade has also increased. The country’s foreign trade has reached Rs. 1,949.06 billion during the review period which is 29.5 per cent more than the previous year.

With the increase in exports, its contribution to total trade still reached only 9.53 per cent during the review period while the share of import is 90.47 per cent.

In 11 months, the country imported petroleum products worth Rs. 281.59 billion, including diesel worth Rs. 145.21 billion, petrol of Rs. 62.91 billion, aviation fuel worth Rs. 12.88 billion and kerosene of Rs. 1.43 billion.

Likewise, the country imported liquefied petroleum gas (LPG) worth Rs. 59.16 billion during the review period.

Strangely, an agrarian country, Nepal is spending a huge amount to import food items.

According to the statistics, Nepal imported maize worth Rs. 17.83 billion, paddy and rice worth Rs. 45.28 billion and wheat worth Rs. 5.63 billion.

Nepal’s export trade, though augmented, was heavily dependent on crude soybean and palm oil.

During the review period, the country imported crude soybean oil worth Rs. 53.25 billion, palm oil worth Rs. 36.59 billion and sunflower worth Rs. 17.71 billion.

According to the statistics, soybean oil worth Rs. 46.58 billion and palm oil worth Rs. 39.1 billion were exported in the last 11 months of the current fiscal year.