Kathmandu, 11 January l Nepal Rastra Bank's Economic Research Department, based in Baluwatar, Kathmandu, has released its latest report, providing a detailed insight into the country's economic health for the first five months of the fiscal year 2080/81, concluding in mid-December. The findings paint a picture of robust economic resilience in the face of global uncertainties.
Inflation Stability: The report reveals that Nepal has maintained inflation stability, with the Consumer Price Index (CPI)-based inflation standing at a controlled 4.95 percent on a year-on-year basis, indicating prudent economic management.
Trade Dynamics and Balanced Deficit: Trade dynamics showcase strategic balance, with a 3.4 percent reduction in imports and a 6.1 percent contraction in exports. This resulted in a commendable 3.1 percent decrease in the trade deficit, reflecting a well-calibrated approach to international trade.
Remittances Surge: A standout feature is the significant surge in remittances, which increased by an impressive 27.6 percent in NPR terms and 24.5 percent in USD terms. This surge underscores the resilience of Nepal's remittance sector and its crucial role in the national economy.
Balance of Payments Surplus: Nepal continues to maintain a surplus in the Balance of Payments, with a noteworthy Rs. 210.59 billion surplus, highlighting the effectiveness of economic strategies and fiscal policies.
Robust Foreign Exchange Reserves: Gross foreign exchange reserves remain robust at NPR 1767.04 billion and USD 13.31 billion, showcasing Nepal's capacity to weather external economic challenges.
Government Fiscal Responsibility: The report indicates responsible fiscal management by the government, with expenditures reaching Rs. 453 billion and revenue collection at Rs. 363.43 billion, reflecting a balanced financial approach.
Money Supply and Credit Growth: Positive trends are observed in broad money (M2) and credit growth, with a 4.7 percent increase in M2 and a substantial year-on-year expansion of 14.4 percent. Deposits at Banking and Financial Institutions (BFIs) increased by 4.6 percent, and private sector credit rose by 2.3 percent, indicating a healthy financial environment.
Year-on-Year Growth: Comparing year-on-year data, deposits saw a significant 15 percent increase, and private sector credit witnessed a robust 4.5 percent uptick, showcasing sustained growth in the financial sector.
This comprehensive report positions Nepal as a beacon of economic stability in a challenging global landscape. The positive indicators across various economic sectors underscore the nation's resilience and adaptability. The Nepal Rastra Bank's Economic Research Department remains vigilant in its commitment to monitoring and analyzing economic trends, ensuring informed decision-making for the nation's financial future.
