Double-digit inflation hounds economy

Inflation continued to remain in the double digits in the fifth month of the fiscal year due to dearer food . The rate of increase in prices was recorded at 10.4 percent during the period mid-November to mid-December, the second consecutive month of double-digit inflation. 

According to a Nepal Rastra Bank (NRB) report on the macro economy of the country released on Monday, food prices surged 14.5 percent while non- food prices went up 6.7 percent in the fifth month. Food prices were pushed up by a surge in vegetable prices which soared 36.6 percent compared to the 4 percent growth during the same period in the last fiscal year.   

Meat and fruit prices followed vegetable prices with rises of 27.9 percent and 16.8 percent respectively up from 13.3 percent and 7percent rises of last year. 

Similarly, prices of clothing and footwear registered the highest rise of 11.7 percent. As far as region-wise inflation is concerned, the Tarai has come ahead with a rise of 10.9 percent followed by Kathmandu and the hilly region. 

Meanwhile, revenue collection grew 17.6 percent to Rs 114.51 billion during the first five months this year. The figure is lower compared to the growth rate of 25.3 percent in the last fiscal year. “A sharp decrease in the growth of customs revenue and income tax resulted in a low growth in revenue,” said the central bank. Customs duty collection inched up 6.7 percent compared to the 42 percent rise during the same period last year. Income tax also grew 14.3 percent against the growth of 37.1 percent last year. During the period, capital expenditure rose 10.3 percent to Rs 5.87 billion against a rise of 0.5 percent during the same period last year.

As far as foreign trade is concerned, merchandise exports rose 13.7 percent to Rs 37.37 billion while imports climbed 19.9 percent to Rs 270.35 billion. 

During the period, the country’s trade deficit surged 21 percent to Rs 232.99 billion. Meanwhile, exports to India jumped 17.4 percent and to other countries 7.3 percent.  Imports from India surged 23.2 percent and from other countries 14.1 percent. 

The country’s balance of payments (BoP) recorded a surplus of Rs 68.02 billion due to slowed growth in imports and high growth in workers’ remittance, according to the report. The country’s foreign exchange reserves reached Rs 625.47 billion. 

source-ekantipur.com