Nepal's foreign trade statistics for the first two months of the fiscal year 2079/80 have been unveiled. Nepal’s trade deficit decreased by 9.45 percent to Rs. 2.44 Kharba as against Rs. 2.70 Kharba in the previous year, the government data showed on Sunday.
The trade deficit is the amount by which the cost of a country's imports exceeds the value of its exports.
The trade deficit is one of the major causes that leads the national economy to a downturn side. Nepal has been suffering an imbalance figure in import and export factors.
Top ten imported goods by Nepal during the first two-month of the Fiscal Year
Imports till Bhadra month of FY 2079-2080, on the other hand, saw a decline of 13.01 percent, amounting to RS. 2.73 kharba. However, In the corresponding period of the previous year, Nepal had imported goods worth Rs. 3.14 Kharba.
During two months, Mineral fuels, Animal or vegetable oils and Iron/steel remained the top imported items, with an increased demand for Machinery equipment and pharmaceutical products.
Last month, nation made an import worth Rs. 1.31 Kharba as against Rs. 2.73 Kharba for Bhadra, which shows that the imports has increased significantly in this month.
It is worth noting that raw materials and intermediates account for a considerable proportion of Nepal’s exports, while finished products have an overwhelming presence in Nepal’s imports basket.
Previously, the government has also restricted the imports of 10 goods, that it considers luxury as the country has not seen much improvement in its foreign currency reserves.
Top ten exported goods by Nepal during the first two-month of the Fiscal Year.
Talking about the country's exports, they crossed Rs. 28.68 Arba in two month by sectors such as animal and vegetable oils, fibers, gems and jewelry, and carpets and related floor covering accumulating the highest exports.
Previously, Nepal had managed to export goods worth Rs. 44.03 Arba. Exports have decreased by 34.88 percent in the first two month of the current fiscal year as compared to last year.
The government data shows that the import has decreased which is a good sign as a rising level of imports and a growing trade deficit can have a negative effect on a country's exchange rate.
A country's importing and exporting activity can influence its GDP, its exchange rate, and its level of inflation and interest rates. Hence, the imports declining is a good sign for trade balance but for export to be declining is not good for the economic development of a country.