Kathmandu, May 16: Nepal has seen a ballooning trade deficit of billions of rupees annually as it failed to adopt an export-oriented economic policy. As per the preliminary statistics released by the Trade and Export Promotion Centre, the trade deficit has now reached to Rs 887 billion increasing by around 24 percent in the first eight months of the current fiscal year.
The trade deficit has increased due to the burgeoning import of different goods and services in the country in a recent period as well as the lack of export of domestic products as compared to import. Nepal imports goods and services mainly from India, China, and third countries.
Nepal also supplies goods to different countries including Bangladesh, UK, USA, Germany, Turkey, France, Italy, Japan, Canada, Australia, and Denmark. The export and import have a contribution of six and 14 percent respectively in total trade of the country. The total export of the country increased by 15.3 percent and reached to Rs 61.22 billion while import surged by 22.9 percent and reached to Rs 949 billion during the first eight months of the current fiscal year. Nepal exported iron products, woolen carpet, readymade clothes, jute and jute products, pashmina, tea, juice, cardamom, and herbs during the period. Import of petroleum products in the first eight months of the current fiscal year of 2018/19 increased around 36 percent to reach Rs 137.6 billion.
Likewise, import of steel products has seen a surge by 33.7 percent to stand at Rs 120.4 billion, transport materials and its machinery parts by 14.2 percent to reach Rs 64.1 billion and electronic and electronics materials by 39.1 percent to sit at Rs 36.7 billion. Similarly, import of gold surged 13.6 percent to reach Rs 23.4 billion and medicines 13.6 percent to stand at Rs 20.9 billion. Import of such materials would help mobilize a country’s economy in the context when most of the imported materials were being used in industrial production, goods transport, and public transportation, economist Radhe Shyam Malakar believes.
To reduce the trade deficit, timely amendment of commerce and industrial policy and implementation of policy on related subjects should be in place. Creation of job opportunities at home to engage around 5 million youths who are toiling in foreign countries and focus on agriculture are other things to be paid attention to. The situation of imported materials being sold for a relatively cheaper price as compared to the products produced at home is another drawback affecting trade-deficit, claimed economists. RSS