Prices rise 12.9pc, remittances up by Rs 169 billion

Consumer prices rose by 12.9 percent in the first 10 months of the current fiscal year, as pressure from rising food and beverages prices mounted during the period. Consumer price index the country´s main gauge of inflation trends grew 9.2 percent, in the same period last year. "The inflation, in the review period, was driven mainly by 16.5 percent rise in food and beverages group," Nepal Rastra Bank (NRB), the country´s central bank, said. Of the items in the food and beverage group, prices of sugar and sugar-related products increased by a stunning 66.9 percent. This is in sharp contrast to last year´s decline of 0.5 percent.

Rising price indices of vegetables and fruits which topped 33.5 percent and 27.5 percent, and increment in prices of meat, fish and eggs also contributed to a higher inflation rate, the central bank said. During the period, the indices of pulses and the subgroup of grains and cereal products also rose 26.3 percent and 6.3 percent, respectively. Along with the rise in inflation, the year-on-year salary and wage rate index also rose 21.1 percent in the 10-month period, cushioning the impact of commodities price hike to some extent. In the same period last year salary and wage rate index had gone up seven percent.

The latest NRB report also shows that the overall balance of payment (BOP) posted a significant surplus of Rs 43.10 billion compared to Rs 19.9 billion recorded in the corresponding period last year. Simultaneously, the current account also recorded a huge surplus of Rs 37 billion in the review period. "This was largely due to 55.5 percent hike in workers´ remittances and 28.4 percent increment in grants," NRB said. Workers´ remittances stood at Rs 169.17 billion in the first 10 months of the current fiscal year. In the whole of last year, the country had earned a workers´ remittance income of 142.68 billion.

As more money is coming in from abroad, the country´s foreign exchange reserve posted a robust 33.3 percent growth (Rs 283.4 billion) in the review period. On the basis of the US currency, gross foreign exchange reserves rose 15.4 percent to US$ 3.6 billion in the 10-month period. In foreign trade, NRB report says exports went up by 19.8 percent, while total imports also increased by 25.4 percent in the first 10 months of the current fiscal year. Due to discrepancies in exports and imports, trade deficit rose 27.4 percent to Rs 171.99 billion in the review period. According to NRB, exports rose in the 10-month period due to surge in overseas supply of readymade garments, textile, GI pipe, catechu, handicraft products and toothpaste, while imports surged due to rise in imports of machinery and parts, vehicles and spare parts, cold-rolled sheet in coil, cement, medicine, gold, electrical, MS billet and crude soybean oil, among others.
Source: Republica