Trade deficit jumps 13 percent to Rs 716.38b

KATHMANDU, August 1:

The trade deficit of the country continued ballooning in last fiscal year as the country continued importing more goods and commodities than what it exported to other countries.

According to a preliminary data provided by the Department of Customs (DoC), Nepal's trade deficit for Fiscal Year 2014/15 stood at Rs 716.38 billion, up by 13.46 percent on Fiscal Year 2013/14 when it stood at Rs 631.42 billion. The increment rate of the deficit in the last fiscal year -- 2014/15 -- is, however, lower compared to the 20.5 percent surge in deficit seen in Fiscal Year 2013/14.

This means the country registered a daily trade deficit of Rs 1.96 billion in Fiscal Year 2014/15. Over the last one year, the country imported goods and commodities worth Rs 801.22 billion while the total value of exports in the review period stood at Rs 84.84 billion.

Trade experts underline the need to boost competitiveness of the country in the manufacturing sector to reduce such whopping trade deficits.

"The cost of the production here, due to various factors like labor cost and manufacturing cost, is very high. We have to improve our production capacity as well, as there should be an ease in transfer of goods to boost exports," Purushottam Ojha, a former secretary at the Ministry of Commerce and Supplies, told Republica.

He also said that Nepal should focus on high-value commodities like forest-based products, non-timber products and other agro products to reduce the trade deficit. "High-value production can fetch more money even when exported in small quantities. We should also encourage the cement industry as that has a good possibility for exports," he added.

According to the DoC data, the country imported vehicles and their spares worth Rs 49.43 billion, iron and steel worth Rs 76.63 billion, and Rs 55.83 billion in electric machinery and their spare parts, among other products, during the review period.

The list of exported products in Fiscal Year 2014/15 includes coffee and tea (Rs 7.24 billion), carpet, clothing and floor covering (Rs 7.26 billion), and fruits (Rs 6.9 billion).

Source: republica