10 Months Macro Economic Indicators of FY 2024/25: Remittance Inflows Risen by 13.2%, Inflation at 2.77%

Nepal Rastra Bank, the central bank of Nepal, has unveiled the current macroeconomic and financial situation of Nepal based on ten months of data for FY 2024/25.

Overall

Nepal Rastra Bank estimated that the inflation remained at 2.77 percent on a y-o-y basis. The gross foreign exchange reserves stood at 18.40 billion in USD terms, whereas the total imports and exports increased by 13.1 percent and 72.7 percent, respectively.

The NEPSE index stood at 2620.27 in mid-May 2025 compared to 1998.89 in mid-May 2024.

Inflation

The y-o-y consumer price inflation stood at 2.77 percent in mid-May 2025 compared to 4.40 percent a year ago.

The y-o-y wholesale price inflation stood at 3.95 percent in mid-May 2025 compared to 5.68 percent a year ago. The y-o-y wholesale price of consumption goods increased 10.89 percent, while intermediate goods and capital goods increased 0.10 percent and 2.73 percent, respectively. The y-o-y wholesale price of construction material increased 2.67 percent in the review month.

Import and Export

During the ten months of 2024/25, merchandise exports increased 72.7 percent to Rs. 217.91 billion against a decrease of 3.6 percent in the same period of the previous year. Destination-wise, exports to India, China and other countries increased 104.7 percent, 5.1 percent, and 4.2 percent, respectively. Exports of soybean oil, polyester yarn and thread, tea, jute goods, and oil cakes, among others, increased, whereas exports of palm oil, zinc sheet, readymade garments, juice, and cardamom, among others, decreased in the review period.

During the ten months of 2024/25, merchandise imports increased 13.1 percent to Rs.1474.19 billion against a decline of 2.4 percent a year ago. Destination-wise, imports from India, China and other countries increased 7.9 percent, 15.1 percent, and 28.3 percent, respectively. Imports of crude soyabean oil, rice/paddy, edible oil, transport equipment, vehicle and spare parts, sponge iron, among others increased, whereas imports of petroleum products, gold, electrical equipment, chemical fertilizer, and coal among others decreased in the review period.

The total trade deficit increased 6.7 percent to Rs. 1256.28 billion during the ten months of 2024/25. Such a deficit had decreased by 2.3 percent in the corresponding period of the previous year. The export-import ratio increased to 14.8 percent in the review period from 9.7 percent in the corresponding period of the previous year.

Services and Remittance

Net services income remained at a deficit of Rs. 86.53 billion in the review period compared to a deficit of Rs. 50.31 billion in the same period of the previous year.

Remittance inflows increased 13.2 percent to Rs. 1356.61 billion in the review period compared to an increase of 16.9 percent in the same period of the previous year. During mid-April to mid-May 2025 (Baisakh, 2082), remittance inflows stood at Rs. 165.30 billion. In the same period of the previous year, such inflows amounted to Rs. 115.99 billion.

Inter-bank Transaction

In the review period, BFIs' inter-bank transactions amounted to Rs. 1,620.54 billion on a turnover basis, including Rs. 1,470.86 billion inter-bank transactions among commercial banks, and Rs. 149.68 billion among other financial institutions (excluding transactions among commercial banks). In the corresponding period of the previous year, such transaction was Rs. 3,821.09 billion, including Rs. 3,477.04 billion among commercial banks and Rs. 344.05 billion among other financial institutions (excluding transactions among commercial banks).

Price of Oil and Gold

The price of oil (Crude Oil Brent) in the international market decreased 20.76 percent to US dollar 65.91 per barrel in mid-May 2025 from US dollar 83.18 per barrel a year ago. The price of gold increased 36.19 percent to US dollar 3191.95 per ounce in mid-May 2025 from US dollar 2343.80 per ounce a year ago.

Foreign Exchange Reserves and Adequacy Indicator

Gross foreign exchange reserves increased 23.1 percent to Rs. 2512.95 billion in mid-May 2025 from Rs. 2041.10 billion in mid-July 2024. In US dollar terms, the gross foreign exchange reserves increased 20.5 percent to 18.40 billion in mid-May 2025 from 15.27 billion in mid-July 2024.

Based on the imports of ten months of 2024/25, the foreign exchange reserves of the banking sector are sufficient to cover the prospective merchandise imports of 17.4 months, and merchandise and services imports of 14.6 months. The ratio of reserves-to-GDP, reserves-to-imports, and reserves to-M2 stood at 41.1 percent, 121.4 percent, and 33.8 percent, respectively, in mid-May 2025. Such ratios were 35.8 percent, 108.6 percent, and 29.3 percent, respectively, in mid-July 2024.

Exchange Rate

Nepalese currency vis-à-vis the US dollar depreciated 2.11 percent in mid-May 2025 from mid-July 2024. It had depreciated 1.61 percent in the same period of the previous year. The buying exchange rate per US dollar stood at Rs. 136.24 in mid-May 2025 compared to Rs. 133.36 in mid-July 2024.

Nepal Government Expenditure and Revenue

According to the Ministry of Finance, Financial Comptroller General Office (FCGO), the total expenditure of the Government of Nepal stood at Rs. 1157.89 billion during the ten months of 2024/25. The recurrent expenditure, capital expenditure, and financial expenditure amounted to Rs. 773.23 billion, Rs. 120.38 billion, and Rs. 264.29 billion, respectively, in the review period.

In the review period, total revenue mobilization of the Government of Nepal (including the amount to be transferred to provincial and local governments) stood at Rs. 922.43 billion. The total revenue comprises tax revenue amounting to Rs. 828.94 billion and non-tax revenue of  Rs. 93.49 billion in the review period.

Cash Balance of Government

Cash Balance at various accounts of the GoN maintained with NRB remained Rs. 360.98 billion (including Provincial Government and Local Government Accounts) in mid-May 2025. Such a balance was Rs. 93.96 billion in mid-July 2024.

Banking

Domestic credit increased 2.1 percent in the review period compared to an increase of 2.8 percent in the corresponding period of the previous year. On a y-o-y basis, domestic credit increased 5.4 percent in mid-May 2025.

Monetary sector's claims on the private sector increased 7.6 percent in the review period compared to an increase of 5.7 percent in the corresponding period of the previous year. On a y-o-y basis, such claims increased 8.0 percent in mid-May 2025.

Deposits at Banks and Financial Institutions (BFIs) increased by Rs. 399.81 billion (6.2 percent) in the review period compared to an increase of Rs. 443.08 billion (7.8 percent) in the corresponding period of the previous year. On a y-o-y basis, deposits at BFIs expanded 11.4 percent in mid-May 2025.

Private sector credit from BFIs increased Rs. 368.68 billion (7.3 percent) in the review period compared to an increase of Rs. 225.24 billion (4.7 percent) in the corresponding period of the previous year. On y-o-y basis, credit to the private sector from BFIs increased 8.4 percent in mid-May 2025.

Interest Rates

The average base rates of commercial banks, development banks, and finance companies stood at 6.17 percent, 8.24 percent, and 9.11 percent, respectively, in the tenth month of 2024/25. The average base rate of commercial banks, development banks, and finance companies was 8.34 percent, 10.15 percent, and 11.61 percent, respectively, in the corresponding month a year ago.

Balance of Payments

The Balance of Payments (BOP) remained at a surplus of Rs.438.52 billion in the review period compared to a surplus of Rs.392.64 billion in the same period of the previous year. In US Dollar terms, the BOP remained at a surplus of 3.23 billion in the review period compared to a surplus of 2.95 billion in the same period of the previous year.