Economic Downturn During Festivals: Contraction in Import Figures Indicating Recession

In a month when demand for goods is typically high due to festivals, imports have seen a decline. As per Customs Department data released on Thursday, goods worth a total of Rs 1.5 Kharba were imported in the month of Kartik.

The decrease in imports during festive months like Dashain and Tihar has adversely affected revenue collection. Government data reveals that a total of 57 Arba in revenue was collected in Kartik, impacted by a 14-day holiday period. In Ashwin, 1.48 Kharba worth of goods were imported.

Import Trends:

The Customs Department reports that goods and services totaling Rs 5.12 Kharba have been imported until Kartik of the current year, marking a 3.79% decrease compared to the same period in the last fiscal year. Among the top imported goods, significant items included mineral fuels/oils, iron/steel, electrical machinery, mechanical appliances, and vehicles. 

Despite a ban on the import of some luxury items last year, goods and services worth Rs 5.32 Kharba were imported in the corresponding four months. The market is evidently in a recession, attributed to reduced imports and no uptick in domestic production compared to the period when a partial import ban was in place.

Export Trends:

Export data underscores the stagnant production scenario, with a decline observed over 4 months. Goods worth a total of 50.56 Arba rupees have been exported until Kartik  primarily driven by sectors such as iron/steel, coffee, tea & spices, carpets and textile floor coverings, and man-made staple fibers, representing a 7.68% decrease compared to the same period in the last fiscal year, where exports totalled 54.77 Arba.

The substantial drop in imports has resulted in a reduction in the trade deficit. According to departmental reports, there was a trade deficit of 4.77 Kharba from Shrawan to Kartik in the last financial year, whereas this year, the deficit stands at 4.61 Kharba during the same period.