Nepal sees expansion in trade deficit by 15.3 percent in 2006/07

The trade deficit of Nepal has expanded by 15.3 percent in the fiscal year 2006/07 as the country saw higher rate of imports over export, said a report of Ministry of Finance. However, this rate is a decrease compared to the previous year. Trade deficit had widened by 25.1 percent in the fiscal year 2005/06.

According the report, relatively lower rate of growth in imports contributed to the compression in trade deficit compared to that of preceding year. in this fiscal year, the total imports rose by 10.3 percent iin comparison to a higher growth of 16.3 percent in the previous year.

Imports from India increased by 9.9 percent in the review period compared to a significant growth of 20.8 percent in the previous year. Likewise, imports from other countries scaled by 11.0 percent in the review year while previous year saw a growth of 9.6 percent.

The rise in imports from India was on account of the increased level of imports of vehicles & spare parts, cold-rolled sheet in coil, thread, hot-rolled sheet in coil, and electrical equipment. Similarly, the rise of imports from other countries was due to the acceleration of imports of gold, crude palm oil, computer parts, telecommunication equipment & parts and betel nut, among others, from other countries, the report said.

Total exports rose marginally by 0.9 percent in 2006/07 compared to a growth of 2.6 percent in the previous year. The report has stated that problems in peace and security, frequent strikes and power shortages were responsible factors to decrease the export. The export in previous fiscal year had recorded the growth by 4.6 percent in 2005/06 .