Nepal's Trade Deficit Narrows as Imports Decline, Exports Face Downturn Too
Nepal's trade report for the first two months (Shrawan- Bhadra) of the fiscal year 2080/81 is out. The trade deficit, which is the gap between what Nepal imports and what it exports, has decreased by about 4.74 percent. This means that the difference between the cost of imports and the value of exports has gone down a bit, which is a positive sign for the country's economy.
Why does this matter? Well, a big trade deficit can put a strain on a nation's economy. Nepal has been grappling with an imbalance in its import and export numbers, and this improvement is a step in the right direction.
Top ten imported goods by Nepal during the first two months of the Fiscal Year:
In the first two months of the fiscal year, imports decreased by around 5.06 percent, totaling about Rs. 2.59 Kharba. In the same period the previous year, Nepal had imported goods worth Rs. 2.73 Kharba.
The top imported items were things like mineral fuels, iron/steel, and electrical machinery. People also seem to be buying more mechanical appliances and vehicles.
Top ten exported goods by Nepal during the first two months of the Fiscal Year:
Talking about the country's exports, they crossed Rs. 26.44 Arba in two months by sectors such as coffee, tea & spices, Iron/steel, and man-made staple fibers accumulating the highest exports.
However, exports have actually gone down by about 7.79 percent compared to last year when Nepal managed to export goods worth Rs. 28.68 Arba.
While the decrease in imports is good news because it can help stabilize a country's exchange rate, the drop in exports isn't ideal for economic growth. When a country exports less, it can affect things like GDP, exchange rates, inflation, and interest rates.
In simpler terms, Nepal is spending a bit less on imports, which is good, but it's also earning less from exports, which isn't so great for the country's overall economic development. Finding a balance between these two is key for Nepal's economic health.
