Nepal external sector performance continues to deteriorate, drawing concern from related stakeholders.
Despite a steady economic growth rate over the last three years, some of Nepal’s macroeconomic indicators show that all is not well with the country’s external sector.
According to Nepal Rastra Bank’s (NRB) recent update, the country’s Balance of Payments (BoP) has fallen by NPR 67.4 billion in FY 2018-19 compared to the surplus of NPR 960 million earned in FY 2017-18.
Alarmingly, Nepal registered a BoP deficit throughout the last fiscal year owing to the increasing trade deficit, along with no earnings in terms of foreign currency.
Nepal recorded a rise in merchandise imports by 13.9 percent to NPR 1,418.54 billion in 2018-19.
On the other hand, the country’s exports increased by a smaller margin of 19.4 percent from NPR 97.11 billion. This imbalance between imports and exports resulted in an increased trade deficit of NPR 1,321.43 billion during 2018-19.