Decreased inflation, increased remittance, deficit current account, decreased FDI flows, fiscal surplus, increased expenditure, increased revenue: The economic performance of five months

The central bank of the country published its macro-economic update based on five month’s data of 2018/19. The report covers major details on inflation, trade, services, remittance, BOP position, foreign exchange reserves, fiscal deficit, surplus, expenditure, revenue, money supply, deposit, credit liquidity, interest rates and capital market.

Some of the major highlights from the reports are:

Inflation: Inflation remained at 3.7% in the review month compared to 4.2% of the same period last year.

Import: Imports of the nation expanded 34.2% whereas export by only 11.2%.

Services: Net service deficit increased to Rs 8.49 billion compared to that of Rs 4.54 billion in the same period, last year.

Remittance: Remittance increased 31.9% amounting to Rs 376.59 billion. Remittance had decreased to 0.8 percent in the same period of the previous year.

Current account: It posted a deficit of Rs.119.33 billion in the review period against the deficit of Rs.64.11 billion in the same period of the previous year.

BOP position: The overall BOP remained at a deficit of Rs.85.32 billion in the review period compared to a deficit of Rs.5.48 billion in the same period of the previous year.

FDI inflows: Nepal received FDI worth of Rs 6.78 billion which was Rs.11.12 billion last year in the same period.

Exchange rate: Nepalese currency vis-à-vis US dollar depreciated 4.7 percent against 0.2 percent appreciation of last year in between mid-December to mid-July.

Fiscal deficit/surplus: Government of Nepal (GoN) recorded a fiscal surplus of Rs.37.56 billion in five months of 2018/19, which was Rs 4.93 billion in the corresponding period previous year.

Government expenditure:

-Cash basis: Total government expenditure on cash basis stood at Rs.273.74 billion in the review period compared to Rs.256.30 billion in the corresponding period previous year.

-Recurrent expenditure: It stood at Rs.221.96 billion compared to Rs.222.62 billion a year ago.

-Capital expenditure: Capital expenditure remained at Rs.34.04 billion which was Rs.24.79 billion a year ago.

Government revenue: It increased 26.3 percent to Rs.306.87 billion which had increased 17.0 percent to Rs.242.97 billion in the corresponding period previous year.

Banking:

-Deposit collection: Deposits at BFIs increased 6.2 percent in the review period compared to a growth of 5.6 percent in the corresponding period previous year.

-Credit distribution: Credit to the private sector from BFIs increased 10.2 percent in the review period compared to a growth of 8.8 percent in the corresponding period of the previous year.

-Liquidity management: In the review period, NRB mopped up Rs.100.35 billion liquidity through open market operations. Rs.127.20 billion liquidity was mopped up in the corresponding period of previous year.

-Interbank transactions: The inter-bank transactions among commercial banks stood at Rs.564.17 billion and among other financial institutions (excluding transactions among commercial banks) amounted to Rs.108.08 billion.

-Interest rates: The weighted average 91-day Treasury bills rate decreased to 1.00 percent from 5.51 percent a year ago. The weighted average inter-bank transaction rate among commercial banks, which was 4.83 percent a year ago, decreased to 1.20 percent in the review month.