Inflation drops to 10 pc
The year-on-year wholesale price inflation for the first two months of the current fiscal year stood at 10.3 percent compared to 11.1 percent a year ago, Nepal Rastra Bank (NRB) said Monday.
The central bank said such moderation was mainly due to the decline in the price of cash corps and fruits and vegetables under agricultural commodities group in spite of a high increase in the price of imported commodities.
According to the new macro economic report of the bank, the index of agricultural commodities, domestic manufactured commodities and imported commodities increased by 0.7 percent, 15.8 percent and 24.0 percent respectively in the review period as compared to 16.6 percent, 7.8 percent and 4.5 percent in the corresponding period last year.
Of agricultural commodities, the price index of pulses, food grains, livestock production and spices increased by 22.2 percent, 21.5 percent and 13.3 percent and 10.0 percent respectively and the price index of cash corps and fruits and vegetables declined by 23.2 percent and 22.1 percent respectively.
Similarly, the price index of construction materials and food-related products increased by 24.5 percent and 21.8 percent and those of the imported commodities such as petroleum products and coal, price index went up by a whopping rate of 39.2 percent on a year-on-year basis in
mid-September 2008.
The overall yearly salary and wage rate index rose by 9.2 percent. Wages of agricultural, industrial and construction laborers increased by 19.5 percent, 2.7 percent and 8.9 percent respectively in the review period.
In the first two months of 2008/09, the government budget surplus stood at Rs.3.4 billion compared to a surplus of Rs 2.6 billion last year. During this period, the government expenditure increased by 40.4 percent to Rs.15.6 billion compared to an increase of 13.5 percent the previous year due to a rise in the growth of recurrent expenditure, freeze expenditure and principal repayment expenditure.
On revenue side, the government managed to increase its revenue generation by 17.5 percent to Rs.14.6 billion compared to an increase of 15.4 percent last year, contributed by a high rate of growth of income tax, customs duties and VAT.
The foreign trade also showed positive growth during this period, NRB said, In the first two months of this fiscal year, total exports rose by 36.1 percent in contrast to a decline of 3.1 percent in the corresponding period of the previous year. Of the total exports, exports to India rose by 12.2 percent and by 82.0 percent to other countries.
Similarly, total imports rose by 43.3 percent in the first two months compared to 8.1 percent increase last year.
The overall BOP recorded a deficit of Rs. 2.1 billion in the first two months. Previous year had registered a deficit of Rs. 2.7 billion.
Despite surge in trade deficit, significant increase in travel receipts by 40.1 percent and workers' remittances by 73.9 percent led to current account surplus of Rs 454.1 million in the review period, NRB report said.
The gross foreign exchange reserves stood at Rs. 215.4 billion in mid-September 2008, a rise of 1.3 percent compared to the level as at mid-July 2008.
Net foreign assets (NFA), after adjusting foreign exchange valuation gain/loss, declined by 1.2 percent (Rs 2.1 billion) in the review period compared to a decline of 2.0 percent (2.7 billion) in the previous year, NRB said.
In the first two months of 2008/09, domestic credit expanded by 4.3 percent mainly due to an increase in private sector credit by 5.9 percent. Deposit mobilisation of commercial banks increased by Rs 19.6 (4.6 percent) billion in the first two months of 2008/09 to touch total deposit of Rs 441.1 billion. nepalnews.com ia Nov 17 08
