Inflation keeps its high at 8.08 pc, BoP remained at surplus of Rs 20.03 bn

KATHMANDU: The year-on-year consumer price inflation remained at 8.08 percent in mid-November 2022 compared to 6.04 percent a year ago. Food and beverage inflation stood at 7.38 percent whereas non-food and service inflation rose to 8.63 percent in the review month.

Under the food and beverage category, y-o-y price index of restaurant & hotel sub-category increased 15.97 percent, tobacco products 11.81 percent, milk products & eggs 9.33 percent, cereal grains & their products 9.19 and alcoholic drinks 8.84 percent.

Under the non-food and services category, y-o-y price index of transportation subcategory increased 17.71 percent, health 11.22 percent, recreation & culture 8.76 percent, housing & utilities 8.49 percent and furnishing & household equipment 8.33 percent.

In the review month, consumer price inflation in the Kathmandu Valley, Terai, Hill and Mountain remained at 7.56 percent, 8.52 percent, 8.03 percent and 6.68 percent respectively. Inflation in these regions were 6.14 percent, 5.42 percent, 7.14 percent and 5.00 percent respectively a year ago.

During the four months of 2022/23, merchandise exports decreased 33.3 percent amounting Rs.54.77 billion against an increase of 104.3 percent in the same period of the previous year. Destination-wise, exports to India and China decreased 42.3 percent and 34.2 percent respectively whereas exports to other countries increased 7.4 percent.

Exports of zinc sheet, particle board, woolen carpets, tea, readymade garments, among others, increased whereas exports of soyabean oil, palm oil, oil cakes, jute goods, textiles, among others, decreased in the review period.

During the four months of 2022/23, merchandise imports decreased 18.1 percent amounting Rs.532.69 billion against an increase of 61.6 percent a year ago. Destination-wise, imports from India, China and other countries decreased 16.5 percent, 20.9 percent, and 20.1 percent respectively.

Imports of petroleum products, chemical fertilizer, sponge iron, gold, aircraft spare parts, among others, increased whereas imports of transport equipment & parts, silver, telecommunication equipments and parts, M.S. billet, crude soyabean oil, among others, decreased in the review period.

As per the Broad Economic Categories (BEC), the intermediate and final consumption goods accounted for 54.6 percent and 45.4 percent of the total exports respectively, whereas the ratio of capital goods in total exports remained negligible at 0.02 percent in the review period.

In the same period of the previous year, the ratio of intermediate, capital and final consumption goods remained 44.1 percent, 0.02 percent and 55.8 percent of total exports respectively.

On the imports side, the share of intermediate goods remained 53.0 percent, capital goods 8.3 percent and final consumption goods remained 38.7 percent in the review period. Such ratios were 53.1 percent, 11.1 percent and 35.8 percent respectively in the same period of the previous year.

The current account remained at a deficit of Rs.35.40 billion in the review period compared to a deficit of Rs.220.91 billion in the same period of the previous year. In the US Dollar terms, the current account registered a deficit of 278.0 million in the review period compared to a deficit of 1.86 billion in the same period last year.

In the review period, capital transfer increased 18.1 percent to Rs.2.97 billion and net foreign direct investment (FDI) remained Rs.429.2 million. In the same period of the previous year, capital transfer and net FDI amounted to Rs.2.52 billion and Rs.6.63 billion respectively.

Balance of Payments (BOP) remained at a surplus of Rs.20.03 billion in the review period compared to a deficit of Rs.150.38 billion in the same period of the previous year. In the US Dollar terms, the BOP remained at a surplus of 149.6 million in the review period compared to a deficit of 1.27 billion in the same period of the previous year.

Remittance inflows increased 20.4 percent to Rs.378.04 billion in the review period against a decrease of 7.0 percent in the same period of the previous year. In the US Dollar terms, remittance inflows increased 10.8 percent to 2.93 billion in the review period against a decrease of 7.3 percent in the same period of the previous year.

Number of Nepali workers (institutional and individual-new) taking approval for foreign employment increased 102.5 percent to 195,196 in the review period. The number of Nepali workers (Renew entry) taking approval for foreign employment increased 46.4 percent to 87,428 in the review period. It had increased 249.1 percent in the same period of the previous year.

Net transfer increased 20.2 percent to Rs.417.38 billion in the review period. Such a transfer had decreased 6.9 percent in the same period of the previous year.