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A statement issued by the Nepal Rastra Bank (NRB) to portray economic activities of last year showed that this volume of trade deficit accounted for 31.5 percent of the GDP.
Even though there had been a sound growth of 13.5 percent in exports, a whopping rise of 28.2 percent rise in imports, mainly from India, widened the trade deficit to an alarming level.
Nevertheless, the NRB report also revealed the share of India in Nepal's total foreign trade plunging by 58.2 percent from previous year's 64.3 percent.
During the period, the current account of the balance of payment (BOP) witnessed a huge surplus of Rs 41.4 billion compared to a surplus of Rs 23.7 billion recorded last year.
The central bank has ascribed the significant current account surplus last year to the rise of 36.5 percent in net transfers.
As a result, the overall BOP posted a significant surplus of Rs 37.7 billion in 2008/09, compared to a lower surplus of Rs 29.7 billion in the preceding year.
Similarly, the volume of gross foreign exchange reserves stood at Rs 280 billion, an increment of 31.7 percent compared to last year's figures.
The bank has stated that the current level of reserves is adequate for financing merchandise imports of 11.8 months, and merchandise and service imports of 9.7 months.
The annual average consumer inflation surged to 13.2 percent, compared to an increase of 7.7 percent recorded a year earlier. The annual average wholesale price index increased by 12.8 percent in 2008/09, as compared to a rise of 9.1 percent in the previous year.
Owing primarily to the increase in the salary of civil servants in mid-September last year, the annual average salary and wage rate index rose by 15.3 percent in 2008/09. It had increased by 9.7 percent in the previous year.
The highlight of lat year’s economic activities also revealed that the overall budget deficit remained at Rs 26.2 billion, which was 2.7 percent of the GDP, while the domestic financing of the budget deficit through the issuance of securities amounted to Rs 18.4 billion, which accounted for 2.9 percent of GDP.
The volume of domestic credit increased by 24.7 percent in 2008/09 compared to a growth of 21.3 percent a year ago.
During the period, the flow of remittance in the country swelled to a record 47 percent to Rs 209.7 billion last year. nepalnews.com
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