How Did We Perform As a Nation in The First Seven Months of This Fiscal Year? A Quick Summary

The central bank has published macro-economic data based on the first seven month's data of FY 2077/78. 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 the capital market.

Some of the major highlights from the reports are:

Inflation: The y-o-y consumer price inflation stood at 2.70 percent in the seven months of 2020/21 compared to 6.87 percent a year ago. Food and beverage inflation stood at 3.02 percent whereas non-food and service inflation stood at 2.44 percent in the review month.

Import and export: In seven months of 2020/21, merchandise exports increased 7.6 percent to Rs.69.92 billion compared to an increase of 22.4 percent in the same period of the previous year. Destination-wise, exports to India and other countries increased 10.0 percent and 4.9 percent respectively whereas exports to China decreased 47.7 percent. Exports of soyabean oil, cardamom, jute goods, pashmina, polyester yarn, and threads, among others, increased whereas exports of palm oil, pulses, zinc sheet, juice, wire, among others, decreased in the review period.

In seven months of 2020/21, merchandise imports increased 0.01 percent to Rs.803.64 billion against a decrease of 3.6 percent a year ago. Destination-wise, imports from India, increased 7.1 percent whereas imports from China and other countries decreased 12.4 percent, and 10.8 percent respectively. Imports of rice, crude soyabean oil, M.S. billet, gold, telecommunication equipment and parts, among others, increased whereas imports of petroleum products, aircraft spare parts, crude palm oil, other machinery, and parts, video television, and parts, among others, decreased in the review period.

Services: Net services income remained at a deficit of Rs.32.03 billion in the review period compared to a deficit of Rs.3.08 billion in the same period of the previous year.

Remittance: Remittance inflows increased 10.9 percent to Rs.567.70 billion in the review period against a decrease of 0.7 percent in the same period of the previous year. In US Dollar terms, remittance inflows increased 6.7 percent to 4.81 billion in the review period against a decrease of 0.5 percent in the same period of the previous year.

The number of Nepali workers (institutional and individual-new and legalized) taking approval for foreign employment decreased 75.9 percent in the review period. It had increased 21.7 percent in the same period of the previous year. The number of Nepali workers (Renew entry) taking approval for foreign employment decreased 67.4 percent in the review period. It had decreased 0.6 percent in the same period of the previous year.

BOP position: Balance of Payments (BOP) registered a surplus of Rs.97.36 billion in the review period as compared to a surplus of Rs.21.61 billion in the same period of the previous year. In US Dollar terms, the BOP recorded a surplus of 817.6 million in the review period compared to a surplus of 191.1 million in the same period of the previous year.

Exchange rate: Nepalese currency vis-à-vis the US Dollar appreciated 3.5 percent in mid-February 2021 from mid-July 2020. It had depreciated 3.9 percent in the same period of the previous year. The buying exchange rate per US Dollar stood at Rs.116.27 in mid-February 2021 compared to Rs.120.37 in mid-July 2020.

Government expenditure and revenue: In the review period, the total expenditure of the federal government according to the Financial Comptroller General Office (FCGO), Ministry of Finance, stood at Rs.499.68 billion. The recurrent expenditure, capital expenditure, and financing expenditure stood at Rs.406.73 billion, Rs. 62.84 billion and Rs. 30.11 billion respectively in the review period.

In the review period, revenue mobilization (including the amount to be transferred to provincial and local governments) stood at Rs. 498.52 billion. The tax revenue and non-tax revenue amounted to Rs. 458.10 billion and Rs.40.42 billion in the review period.

Banking:

-Deposit collection and Credit distribution: Deposits at Banks and Financial Institutions (BFIs) increased 9.8 percent in the review period compared to a growth of 6.4 percent in the corresponding period of the previous year. On a y-o-y basis, deposits at BFIs expanded 22.4 percent in mid-February 2021.

Private sector credit from BFIs increased 14.1 percent in the review period compared to a growth of 8.9 percent in the corresponding period of the previous year. On y-o-y basis, credit to the private sector from BFIs increased 17.3 percent in mid-February 2021.

-Interest rates: The average base rate of commercial banks decreased to 6.97 percent in mid-February 2021 from 9.45 percent a year ago. The weighted average deposit rate and lending rate of commercial banks stood at 4.86 percent and 8.89 percent respectively in mid-February 2021. Such rates were 6.78 percent and 11.94 percent respectively a year ago.

Capital Market

NEPSE index stood 2526.9 in mid-Feb2021 compared to 1346 in mid-Feb 2020. Such index
was 1362.4 in mid-July 2020.

Stock market capitalization in mid-Feb2021 stood Rs. 3406.17 billion compared to Rs. 1792.76 billion in mid-Jul2020.

The number of companies listed at NEPSE stood 216, out of which 145 are Bank and Financial
Institutions(BFIs) and insurance companies, 37 hydropower companies, 19 manufacturing and processing industries, 4 hotels, 4 trading companies, and 7 others. The number of companies listed at NEPSE was 212 in mid-July2020.

The share of BFIs and insurance companies in stock market capitalization is 72.1 percent. Such share for hydropower companies is 6.2 percent, manufacturing and processing industries 4.1 percent, hotels 0.8 percent, trading companies 0.5 percent, and the share of other sector companies is 16.2 percent.

Securities worth Rs. 209.44 billion were listed at NEPSE during the seven months of 2020/21. Such securities comprise government development bonds worth Rs. 150 billion, the ordinary share worth Rs. 35.37 billion, bonus shares worth Rs. 13.71 billion, debenture worth Rs. 7 billion, right share worth Rs. 2.71 billion and mutual fund worth Rs. 653 million.