Increased inflation, increased remittance, deficit BOP, decreased FDI, depreciated NRs, increased government revenue and expenditure- An outlook of Nepal’s macro-economic indicators!

The central bank of the country published its macro-economic update based on four 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 4.2% in the review month compared to 3.9% of the same period last year.

Import: Imports of the nation expanded 35.8% whereas export by only 11.0%.

Services: Net service deficit increased to 13.16 billion compared to that of Rs 3.01 billion in the same period, last year.

Remittance: Remittance increased 36.4% amounting to Rs 312.26 billion. Remittance had decreased to 1.4 percent in the same period of the previous year.

Current account: It posted a deficit of Rs.88.64 billion in the review period against the deficit of Rs.48.98 billion in the same period of the previous year.

BOP position: The overall BOP remained at a deficit of Rs.57.33 billion in the review period compared to a surplus of Rs.2.40 billion in the same period of the previous year.

FDI inflows: Nepal received FDI worth of Rs 4.95 billion which was Rs.10.17 billion last year in the same period.

Exchange rate: Nepalese currency vis-à-vis US dollar depreciated 4.8 percent against 1.1 depreciation of last year in between mid-November to mid-July.

Fiscal deficit/surplus: Government of Nepal (GoN) recorded a fiscal surplus of Rs.51.01 billion in four months of 2018/19, which was Rs.32.15 billion in the corresponding period previous year.

Government expenditure:

-Cash basis: Total government expenditure on cash basis stood at Rs.207.68 billion in the review period compared to Rs.176.70 billion in the corresponding period previous year.

-Recurrent expenditure: It stood at Rs.173.78 billion compared to Rs.152.12 billion a year ago.

-Capital expenditure: Capital expenditure remained at Rs.26.01 billion which was Rs.17.86 billion a year ago.

Government revenue: It increased 30.5 percent to Rs.255.02 billion which had increased 16.3 percent to Rs.195.43 billion in the corresponding period previous year. Government has met 27% of the yearly targeted revenue as of now.

Banking:

-Deposit collection: Deposits at BFIs increased 3.6 percent in the review period compared to a growth of 4.8 percent in the corresponding period previous year.

-Credit distribution: Credit to the private sector from BFIs increased 8.5 percent in the review period compared to a growth of 6.7 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.135.75 billion liquidity was mopped up in the corresponding period of previous year.

-Interbank transactions: The inter-bank transactions among commercial banks stood at Rs.421.91 billion and among other financial institutions (excluding transactions among commercial banks) amounted to Rs.48.69 billion.

-Interest rates: The weighted average 91-day Treasury bills rate decreased to 2.20 percent from 2.55 percent a year ago. The weighted average inter-bank transaction rate among commercial banks, which was 2.68 percent a year ago, decreased to 1.68 percent in the review month.

Photo source: NRB