Rise of industrial capacity utilization, growth in import of raw materials, increase in tourist arrivals and pickup in reconstruction activities after earthquake have indicated that the overall economic activities of the country in the first five months of the ongoing fiscal year 2074/75 (Shrawan – Mangsir 2074) are on track. However, Nepal Rastra Bank (NRB) has said that agriculture is the key to determine the growth of the entire economy. Although agricultural production was adequate during the summer, the Terai floods in Shrawan have hit paddy productions and the performance of agriculture sector will be determined by winter rains.
Based on the data reported by 1 NRB office, 79 branches of RastriyaBanijya Bank Limited, 50 branches of Nepal Bank Limited, 29 branches of NIC Asia Bank Limited, 25 branches of Agricultural Development Bank Limited, 12 branches of Everest Bank Limited, 10 branches of Nepal Investment Bank Limited, 9 branches of Global IME Bank Limited, 5 branches of NMB Bank Limited, 3 branches of Bank of Kathmandu Limited and 2 branches of Prabhu Bank Limited and 1 branch each from Prime Commercial Bank Limited and Century Commercial Bank Limited, Sanima Bank Limited and Civil Bank Limited conducting government transactions and released reports from 81 DTCOs and payment centers, the followings are the major macroeconomic situations of Nepal for the first five months (Shrawan – Mangsir) of the ongoing fiscal year 2074/75.
Inflation
Inflation has risen to 4.20% in Mangsir 2074 as compared to lowest inflation of 3.90% in Kartik 2074. The overall hike in prices is due to risein food and beverages items.
See
Nepal’s full inflation scenario in ShareSansar’s new economy section
Government Revenue & Expenditure
The Government of Nepal has expected to earn a revenue of Rs 730.05 billion and to spend Rs 1,278.99 billion in the FY 2074/75.
At the end of Mangsir, 2074 the government revenue collection increased by 17 % to Rs 242.97 billion. Such revenue had increased by 84% to Rs 207.60 billion in the corresponding previous year. But the growth rate has been below the targeted level.
On the other hand, the total government expenditure on cash basis amounted to Rs 256.30 billion. Such expenditure was just Rs 194.61 billion in the corresponding period of the previous year 2016/17.
See
Nepal’s Government full revenue and expenditure in ShareSansar’s new economy section
Capital Expenditure
These are the expenditure made on fixed assets. Capital expenditure is funds used to acquire physical assets to improve its value or increase its long-term productivity.
The government had targeted to spend Rs 335.17 billion as capital expenditure. At the end of Mangsir, 2074 only 7.40% of the budgeted capital expenditure (Rs 24.79 billion) was made which seems to be utilized ineffectively and it signifies slow growth of development activities. This shows that developmental works are not going as per the target made by the government, pushing the country backward as well.
See
Nepal’s Capital Expenditure in ShareSansar’s new Economy section
Remittance
Remittance has been one of the major sources strengthening the Nepalese GDP for many years as money sent from abroad by Nepalese are comparatively higher than the income generated from production of goods in the country.
In the review period, Nepal’s workers’ remittance decreased by0.80% to Rs 285.48 billion. The growth in the previous year was 6%. As per NRB, the amount of remittance declined due to fall in number of Nepalese going abroad for foreign employment by 2.50%.
See Nepal’s
Remittance outlook in ShareSansar’s new Economy section
BFIs Deposit & Lending
Deposits at Banks and Financial Institutions (BFIs) increased by 4.40 percent in the review year compared to an increase of 5.70 percent in the previous year.
Credit to the private sector from BFIs increased 7.60percent in the review year compared to a rise of 9.60percent in the previous year. In the review year, private sector credit from commercial banks and development banks increased 7.20 percent and 12.20 percent respectively, while that of finance companies increased 1.90 percent.
See
Nepal’s BFIs Deposits &Lendings in Share Sansar’s new Economy section
Interest Rates
The weighted average 91-day Treasury Bill rate increased to 5.51 percent in fifth month of 2074/75 from 2.34 percent a year ago. Likewise, the weighted average inter-bank transaction rate among commercial banks, which was 2.67 percent a year ago, increased to 4.83 percent in the review month. The average base rate of commercial banks increased to 9.87 %.
See
Nepal’s Interest rates in Sharesansar’s new Economy section
Budget Deficit / Surplus
In the first five months of FY 2074/75, the Government of Nepal (GoN) is at a surplus of Rs 4.93 billion in its budget. Such surplus was Rs 17.65 billion in the corresponding period of the FY 2073/74.
See
Nepal’s Budget Deficit / Surplus at Sharesansar’s new Economy section
Top 5 Imports and Exports
As usual, imports have far exceeded exports of the country, rendering the country with a deficit in balance of payments of Rs 9.27 billion. The summation of top 5 imports amounts to Rs 154.35 billion whereas top 5 exports amounts to Rs 9.20 billion only.
