Trade deficit grows even amid export increase

Kathmandu, July 26:  Nepal's trade deficit swelled to a record of Rs. 1,720.41 billion in the last fiscal year driven by significant imports of petroleum products and low volume of exports.

The country's trade deficit is higher than the annual budget presented by the government in the last fiscal year. In the last fiscal year, the total budget amounted to Rs. 1,564 billion.

According to the annual trade statistics published by the Department of Customs, the country’s trade deficit has increased by 23 per cent to Rs. 1,720.41 billion in the last fiscal year 2021/22.

In the previous fiscal year 2020/21, Nepal had faced a trade deficit of Rs. 1,398.71 billion.

Similarly, Nepal's trade deficit was Rs. 1,321.45 billion in the fiscal year 2018/19 and Rs. 1,099.08 billion in the fiscal year 2019/20.

The trade deficit declined in the fiscal year 2019/20 compared to the fiscal year 2018/19 due to the reduction of trade caused by the impact of COVID-19 pandemic.

The import trade increased by 24.72 per cent to Rs. 1,920.44 billion during the review period, resulting in high trade deficit. In the fiscal year 2020/21, the country imported goods worth Rs. 1,539.83 billion.

According to the statistics, total foreign trade has also increased. The country’s foreign trade has reached Rs. 2,120.47 billion during the last fiscal year which is 26.15 per cent more than the previous fiscal year.

Exports set record at Rs. 200 billion

In the meantime, Nepal’s export trade has set a historic record in the last fiscal year. The country exported goods worth Rs. 200.03 billion during that period, a record-high export of Nepal so far.

Exports had crossed one hundred billion marks for the first time in the fiscal year 2020/21, reaching Rs. 141 billion.

According to the statistics, Nepal’s export trade has increased by 41.47 per cent to Rs. 200.03 billion in the last fiscal year.

Even though exports went up significantly, the ratio of export to import is still 1:9.60. The share of export in the total foreign trade is only 9.43 per cent while that of import is at a whopping 90.57 per cent.

The statistics showed that the growth of export in soybean and palm oil significantly contributed to the achievement in export growth in the last fiscal year.

The share of soybean, palm and sunflower oil to the export trade stood at around 47 per cent during the review period.

The country exported soybean oil worth Rs. 48.12 billion, palm oil worth Rs. 41.04 billion and sunflower worth Rs. 4.5 billion in the last fiscal year. 

Similarly, the country exported cardamom worth Rs. 4.81 billion, tea and coffee worth Rs. 3.55 billion, carpet worth Rs. 10.07 billion, readymade garments worth Rs. 8 billion and textile worth Rs. 3.5 billion in the last fiscal year.

Petroleum imports cross Rs. 336 billion

According to statistics, Nepal imported petroleum products worth around Rs. 336 billion during the last fiscal year.

Diesel is the most imported commodity in the last fiscal year. Diesel worth Rs. 168.23 billion had been imported during the period.

Meanwhile, petrol worth Rs. 71.38 billion, liquefied petroleum gas (LPG) worth Rs. 65.55 billion, aviation fuel worth Rs. 15.15 billion, kerosene Rs. 1.68 billion, lubricants worth Rs. 6.14 billion and petroleum bitumen worth Rs. 7.85 billion had been imported.

The country imported crude soybean oil worth Rs. 46.31 billion, crude palm oil worth Rs. 33.23 billion and crude sunflower worth Rs. 16.49 billion during the review period.

Similarly, maize worth Rs. 19.64 billion, paddy and rice worth Rs. 47.57 billion and wheat worth Rs. 5.66 billion had been imported.

In the meantime, the country imported crude palm oil worth Rs. 41.19 billion, crude soybean oil worth Rs. 56.25 billion and crude sunflower oil worth Rs. 18.64 billion in the last fiscal year.