Nepal’s trade and economic indicators for the first quarter of the fiscal year 2024/25 reveal a mixed economic scenario. The trade deficit has decreased by 4 percent, standing at Rs 352.37 billion. Goods exports decreased by 6.1 percent, totaling Rs 38.38 billion, while goods imports fell by 4.2 percent, amounting to Rs 390.75 billion.
Remittance inflows have risen by 11.5 percent, reaching Rs 473.1 billion, although this is slower compared to the 25.5 percent increase in the same period last year. The current account recorded a surplus of Rs 111.87 billion, up from Rs 59.65 billion last year, and the balance of payments showed a surplus of Rs 184.99 billion, compared to Rs 110.66 billion in the same period of the previous fiscal year.
The average consumer inflation rate for the first quarter of the current fiscal year stands at 4.26 percent. In the month of Ashoj (mid-September to mid-October), the annual point-to-point consumer inflation rate was 4.82 percent, which is lower than the 7.50 percent inflation rate during the same period last year. The food inflation rate stood at 7.18 percent, largely driven by higher prices for vegetables and pulses, while inflation for the non-food and services group was 3.50 percent.
Wholesale inflation for the month of Ashoj was 5.51 percent, up from 2.78 percent last year. The wage and salary index increased by 3.36 percent, compared to a 5.65 percent increase in the same period of the previous year.
The monetary policy for the fiscal year aims to keep inflation around 5 percent and ensure sufficient foreign exchange reserves. As of the end of Ashoj, the reserves were sufficient to cover 14.5 months of goods and services imports. The policy rate has been reduced from 5.5 percent to 5 percent, and the upper limit of the interest rate corridor has been lowered to 6.5 percent.
Regarding money supply and credit flow, the broad money supply increased by 13.3 percent, surpassing the targeted 12 percent growth. Credit to the private sector grew by 6.2 percent, which is below the targeted 12.5 percent increase. These developments highlight a degree of stabilization in the economy, though challenges remain in meeting some targets, particularly with regard to credit flow and inflation management.
