The country is receiving Rs 1.5 billion remittance on an average daily.
“Nepal has received Rs 397.8 billion in nine months of th current fiscal year 2013-14,” according to macroeconomic report for nine months published today by the central bank.
The current trend of remittance inflow indicates that the country is going to receive remittance more than the budget. The government has announced Rs 517.24 billion budget for the current fiscal year.
The remittance inflow surged by 31.5 per cent in the nine months compared to the same period of last fiscal year, the central bank data revealed.
According to World Bank’s Migration and Development Brief, Nepal is the third highest remittance receiver in the world with 24.7 per cent equivalent remittance inflow to Gross Domestic Product (GDP) in the year 2012.
In the last fiscal year 2012-13, the country received Rs 435 billion remittance that was equivalent to 25.6 per cent of the GDP that stood at Rs 1,690 billion.
The increasing remittance inflow has helped Balance of Payment (BoP) and foreign exchange reserve swell. The swelling foreign exchange reserve will help Nepal afford imports for next nine months and eight days.
“The BoP has recorded a surplus of Rs 106.23 billion by mid-April,” it said, adding that the BoP surplus stood at Rs 30.7 billion in the same period in the last fiscal year. The increase in BoP surplus has also been attributed to current account surplus. The current account surplus stood at Rs 68.77 billion, against last year’s Rs 22.24 billion. The rise in the current account surplus was primarily due to a substantial rise in net services, net income, grants as well as a high growth of workers’ remittances.
Trade deficit widens
Trade deficit — difference between exports and imports earnings — in the nine months of the current fiscal year surged by 29.1 per cent to Rs 454.06 billion, the data revealed, adding that the merchandise exports increased by 19.1 per cent to Rs 68.12 billion and merchandise imports surged by 27.7 per cent to Rs 522.19 billion. The increase of major export products including woolen carpet, readymade garment and large cardamom and depreciation of the Nepali rupee against the US dollar helped Nepal earn more from exports.
The price hike, however, seems not to come under the central bank’s target as year-on-year inflation as measured by the consumer price index increased by 9.4 per cent in mid-April compared to 9.5 per cent in the same period of the last fiscal year. The food and beverage group increased by 12.3 per cent, while non-food and services group went up by seven per cent, respectively, the central bank report stated, adding that food inflation had increased by 10.3 per cent and beverage by 8.7 per cent, respectively, in the same period last fiscal year.
Capital expenditure up
The capital expenditure increased by Rs 6.55 billion in the ninth month ending on mid-March of the current fiscal year to reach Rs 22.94 billion. The government had been able to spend Rs 16.39 billion at the end of the eighth month. But, the government has been able to mobilise Rs 252.41 billion revenue in the ninth month, the macroeconomic report. The revenue mobilisation increased by 19 per cent compared to a growth of 22.3 per cent in the same period a fiscal year ago. The decline in the overall revenue growth has been attributed to slow customs revenue and income tax collection.
Customs revenue growth slowed down to 18.5 per cent against 38.9 per cent of the last fiscal year’s same period. The government mobilised Rs 49.37 billion in customs revenue. Likewise, income tax mobilisation increased by 12.3 per cent, against last fiscal year’s 31.1 per cent.
The government has been able to mobilise Rs 72.54 billion in Value added tax (VAT) – some 19.6 per cent growth – compared to the same period of last fiscal year. But non-tax revenues – which surged by 38.8 percent to reach Rs 33.07 billion – posted an encouraging growth from same period of last fiscal year’s decline of 5.7 per cent.