NRB report on macro-economic situation: Veggie prices rise by 73.1 percent

KATHMANDU, APR 30 -

Vegetable prices have continued to soar making general people’s life difficult. The prices increased by 73.1 percent as of mid-March contributing to the overall rise in inflation.

Vegetable prices had gone up by over 70 percent as of mid-February. The prices have been rising for the last few months. Therefore, inflation that moderated to 10.2 percent as of mid-February rose to 10.7 percent as of mid-March, according to the Nepal Rastra Bank (NRB) report on the country’s macro-economic situation.

The country has been witnessing a positive development in foreign trade, with increasing export and only a marginal growth in import, according to NRB. As of mid-March, merchandise export grew by 6.6 percent to Rs 42.84 billion, while import grew by just 1.4 percent to Rs 253.5 billion. Still, Nepal faces a huge trade deficit. With the government taking some stringent measures against import of luxury goods, overall import has come down significantly for the last few months.

However, the worrying factor is Nepal’s increasing trade dependence on India as both export to and import from India have grown significantly, while exports to and imports from third countries have declined. As a result, Nepal’s trade dependence on India has reached 67 percent as of the eighth month of the current fiscal year.

The Balance of payment (BoP) deficit continued to pose a major challenge for the economy with the deficit still standing at Rs 11.30 billion. However, remittance posted a comfortable growth of 12.3 percent to Rs 161.62 billion. The declining trend of the foreign exchange reserve continued even in eighth month. The reserve declined by 4.4 percent to Rs 257.05 billion as of mid-March 2011 from Rs 268.91 billion as of mid-July 2010.

The gross foreign exchange reserves in terms of US dollar also declined by 1.3 percent to $3.57 billion as of mid-March 2011.

The banking sector witnessed some improvement, with commercial banks recording a growth of Rs 12.14 billion in deposits. However, loan amount increased by Rs 54.24 billion. Despite slow growth in deposits, credit to private sector grew by Rs 46.64 billion, according to NRB.



Posted on: 2011-04-30 08:38
http://www.ekantipur.com/2011/04/30/business/nrb-report-on-macro-economic-situation-veggie-prices-rise-by-73.1-percent/333290.html