Imports declined 1.16 percent to Rs 1.592 trillion, exports declined 3.03 percent to Rs 152.38 billion and trade deficit declined 0.96 percent to Rs 1.440 trillion.
KATHMANDU, July 23: Nepal’s total trade volume in Fiscal Year 2023/24 declined 1.33 percent compared to the previous fiscal year due to the economic slowdown that grappled the country throughout the period.
The records of the Department of Customs (DoC) show that the country carried out foreign trade of Rs 1.745 trillion during mid-July 2023 and mid-July 2024. In the FY 2022/23, the total amount under the heading was Rs 1.768 trillion.
The decline in economic activities has been attributed to the massive fall in private sector lending by the banks and financial institutions (BFIs) and pathetic expenses made by the government in development of infrastructure. These sectors largely affect the aggregate demand of the country, according to economists.
The records of Nepal Rastra Bank (NRB) show that the BFIs were able to issue only half of the targeted 11.5 percent credit flow to the private sector in the review period. According to the government records, the construction sector was expected to grow by a negative 2.07 percent in the last fiscal year. Four years ago, the sector witnessed an annual growth of seven percent.
The inadequate capital expenditure of the government during FY 2023/24 took a toll in the construction sector of the country. Of the allocated amount Rs 302 billion under the heading, the realization was only Rs 191 billion. As a result, the investment in the construction sector increased only Rs 20 billion in the last fiscal year. In FY FY 2020/21, investment in this sector had increased by Rs 64 billion.
Rabi Singh, president of the Federation of Contractors’ Associations of Nepal, said the contractors were unable to take bank loans aggressively as the government was unable to pay them on time. “Due to this very reason, the demand for construction materials and workers, among others, fell heavily last year,” he said.
In the review year, the country’s import was down 1.16 percent to Rs 1.592 trillion. Similarly, the export earnings declined 3.03 percent to Rs 152.38 billion.
With a notable fall in import expenses, the country’s trade deficit declined 0.96 percent to Rs 1.440 trillion. In FY 2022/23, the figure stood at Rs 1.454 trillion.
The ratio of import to export rose to 10.45 from 10.26. It means Nepal spent Rs 10.45 on import for every export earning Re 1.