By A Staff Reporter
Kathmandu, Aug. 25: The average consumer price inflation stood at 6.15 per cent in the Fiscal year 2019/20, slightly undermining the central bank’s estimates of 6 per cent.
The Nepal Rastra Bank in its Monetary Policy for the last fiscal had said that the monetary management would focus on containing the consumer price inflation within 6 per cent to maintain the price stability. The previous FY 2018/19 had witnessed 4.64 per cent annual inflation.
However, the year-on-year CPI stood at 4.78 per cent in mid-July 2020 compared to 6.02 per cent a year ago. It was 5.83 per cent in mid-May this year.
According to the annual Macroeconomic and Financial Situation report of the country, food inflation had spiked to 8.16 per cent last year compared to 3.09 per cent a year ago while non-food and services inflation stood at 4.61 per cent coming down from last year’s 5.86 per cent.
The Kathmandu Valley witnessed 6.96 per cent inflation followed by 6.29 per cent in the Terai, 5.10 per cent in the hill and 4.91 per cent in the mountain.
These regions had witnessed 4.86 per cent, 4.26 per cent, 5.00 per cent and 4.91 per cent inflation respectively in the previous fiscal year.
In FY 2019/20, merchandise exports increased by 0.6 per cent to Rs.97.71 billion compared to an increase of 19.4 per cent in 2018/19.
Destination-wise, exports to India increased by 11.8 per cent whereas exports to China and the other countries decreased by 43.5 per cent and 18.2 per cent respectively.
Exports of palm oil, medicine (ayurvedic), herbs, plastic utensils, fruits, among others, increased whereas exports of zinc sheet, wire, polyster yarn and threads, readymade garment and woollen carpet decreased. Likewise, merchandise imports decreased by 15.6 per cent to Rs.1196.8 billion against an increase of 13.9 per cent in the previous year.
Destination-wise, imports from India, China and other countries decreased by 19.9 per cent, 11.5 per cent and 5.3 per cent respectively.
Imports of crude palm oil, crude soybean oil, chemical fertiliser, edible oil, computer and parts, increased whereas imports of petroleum products, transport equipment and parts, M.S. billet, gold, other machinery and parts decreased.
Remittance inflows decreased by 0.5 percent to Rs.875.03 billion in the FY 2019/20 against an increase of 16.5 per cent the previous year.
Number of Nepali workers taking approval for foreign employment dropped by 20.5 per cent in the last fiscal year. It had decreased by 32.6 per cent in the previous year.
Similarly, net transfer income decreased by 1.3 percent to Rs.982.22 billion in the review year. Such income had increased by15.0 percent in the previous year.
Current account deficit goes down
The current account deficit decreased by 87.9 per cent to Rs.32.06 billion last year while such deficit was Rs.265.36 billion in the previous year.
Capital transfer decreased by 8.1 per cent to Rs.14.21 billion and net foreign direct investment (FDI) increased by 49.1 per cent to Rs.19.48 billion. In the previous year, capital transfer and net FDI amounted to Rs.15.46 billion and Rs.13.06 billion respectively.

Balance of Payments (BOP) remained at a surplus of Rs.282.41 billion in the review year against a deficit of Rs.67.4 billion in the previous year.
Gross foreign exchange reserves increased by 34.9 per cent to Rs.1401.84 billion in mid-July 2020 from Rs.1038.92 billion in mid-July 2019.
Domestic credit decreased
Domestic credit expanded by 13.6 per cent in the review year compared to a growth of 21.1 per cent in the previous year. Claims on private sector increased by 12.6 per cent in the review year compared to a growth of 19.1 per cent the previous year.
Deposits at Banks and Financial Institutions (BFIs) increased by 18.7 per cent in the review year compared to an increase of 18 percent in the previous year.
The share of demand, saving and fixed deposits in total deposits stands at 10 per cent, 31.9 per cent and 48.6 per cent respectively in mid-July 2020. Such shares were 9.7 per cent, 32.8 per cent and 46.3 per cent respectively a year ago.