Nepal’s inflation continues at double digit

KATHMANDU: The price of daily essentials in Nepal has increased by 11.3 per cent in the past eight months, said the Nepal Rastra Bank on Tuesday.

The NRB said that the index of food and beverage group increased by 11.3 per cent while non-food and services group rose by 9.3 per cent in mid-March, 2013.

According to the central bank, the CPI inflation increased by 10.2 percent in mid-March 2013 compared to 7.0 percent a year ago.

Similarly, government revenue grew by 23.2 percent to Rs. 177.97 billion and such revenue had risen by 17.4 percent to Rs. 144.47 billion in the corresponding period of the previous year. Of the total revenue mobilization, VAT revenue grew by 17.0 percent to Rs. 53.49 billion, said the Bank.

Revenue collection from imports led to the rise in overall VAT revenue whereas customs revenue rose by 39.7 percent to Rs. 36.46 billion. Likewise, income tax revenue ncreased by 32.4 percent to Rs. 36.73 billion during the review period.

Positive impact of reform in income tax administration and taxpayer education campaign launched recently accounted for such an increase in the income tax revenue during the review period, the macroeconomic situation report stated.

In the period while foreign cash loans amounted to Rs. 6.93 billion, foreign cash grants stood at Rs. 8.68 billion. Such receipts were Rs. 3.27 billion and Rs. 25.80 billion respectively in the corresponding period of the previous year.

A significant rise in imports, relatively lower growth in remittance and a fall in capital as well as current transfer led to a slower growth in net foreign assets of the monetary sector during the review period.

Domestic credit increased by 8.9 percent during eight months of 2012/13. It had increased by 3.4 percent in the corresponding period of the previous year. Reserve money decreased by 10.0 percent as against an increase of 14.1 percent in the corresponding period of the previous year. A decrease in Nepal Rastra Bank’s net claims on government coupled with a slower growth of net foreign assets caused a decrease in reserve money during the review period.

Deposit mobilization of banks and financial institutions increased by 6.8 percent (Rs. 68.62 billion) during eight months of 2012/13. Such deposit mobilization had increased by 11.4 percent (Rs. 94.07 billion) during the review period.

Total trade deficit during eight months of 2012/13 surged by 25.5 percent to Rs. 309.55 billion compared to an increase of 17.1 percent during the same period. Trade deficit with India increased by 28.8 percent during the review period compared to a growth of 11.5 percent in the same period of the previous year.

The overall BOP recorded a surplus of Rs. 11.78 billion during eight months of 2012/13 compared to a surplus of Rs. 81.09 billion during the same period of the previous year, the bank sources said.