Nepal profits Rs 12.49b in service trade

KATHMANDU, March 31 :

Nepal profited Rs 12.49 billion in service trade in the first seven months of the current fiscal year.

According to Nepal Rastra Bank (NRB), Nepal had faced loss of Rs 822 million in service trade in the same period of last fiscal year.

Nepal has been making profit in service trade for the past two fiscal years. But the profit figure during the review period is the highest so far.

The country´s total deficit climbed to Rs 339.81 billion during the review period. Nepal imported goods worth Rs 326.45 billion in the review period, which is seven times the country´s total export earning. However, export of service has overtaken export of goods.

Data of first seven months of fiscal year 2013/14 shows, total export of goods remained at Rs 52.89 compared to export of service trade worth Rs 69.64 billion.

“Export figure of goods is quite pathetic. But growth in export of service trade has given us some hopes,” Maha Prasad Adhikary, deputy governor of NRB, said.

Growth in export of service trade has come mainly from sectors like tourism, remittance, insurance, information technology, banking, telecom and consultancy, among others.

A total of Rs 27.01 billion was spent for service credit in travel (outflow of money) during the review period. Likewise, Nepal´s expenditure in service trade includes expanses made at ports, transportation cost of outgoing workers, and expenditure made by students going abroad.

Large numbers of Nepalis are going abroad and spending more in travel in recent years.

Nepal has been enjoying surplus in service trade since 2011/12. Former commerce secretary Purushottam Ojha sees huge scope of service trade for Nepal at a time when deficit in trade of goods is increasing because of Technical Barriers to Trade (TBTs).

The country suffered loss of Rs 461 billion in 2012/13 and Rs 373 billion in 2011/12 in trade of goods. And the loss is rising with every passing year. Loss is trade of goods is responsible for the country´s overall trade deficit. But Nepal is making profit in service trade even though the profit fell in 2012/13 in comparison to 2011/12.

Though Nepal has prioritized health service, information technology, business process outsourcing, education and other services as well as tourism for trade of services, the country has still to reap expected benefits.

Source: Republica