BoP remains surplus after a year; Inflation at 6.95 percent

September 25, 2019 | Investopaper

Nepal Rastra Bank has published the ‘Current Macroeconomic and Financial Situation of Nepal (Based on One Month’s Data of 2019/20)’ on Tuesday. The report shows a rise in Inflation in the first month of this fiscal year 2019/20.

According to the report, inflation is at 6.95 percent in the month of August. Inflation has increased to this level after 35 months. The last time the prices rose to the present level was in September 2016.

Central Bank has made a target to contain the annual inflation at 6 percent in this fiscal year. The average annual inflation stood at 4.64 percent in the last fiscal year

The hike in prices is attributed to the rise in food prices.

Vegetable prices have shot up 23.38 percent in the first month as compared to the same period in the previous year.

As per the NRB report, the food and beverage inflation stood at 8.02 percent during this period as compared to 6.27 percent in the previous year.

Balance of Payments (BoP) Surplus

The Balance of payments (BoP) recorded a surplus of Rs. 6.05 billion in the month of August 2019. In the corresponding month of the previous fiscal year, BoP stood at a deficit of Rs. 24.77 billion. The BoP entered into a surplus state after a period of one year.

Likewise, the current account remained at a deficit of Rs 9.37 billion during this period. In the same month of the previous fiscal year, the deficit was at Rs. 25.16 billion.

The remittance income has gone up by 2 percent to Rs 75.40 billion. The imports declined by 11.5 percent to Rs 106.73 billion. On the other hand, exports grew by 27.7 percent to Rs 8.84 billion in the month of August.


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