Nepal’s consumer price inflation remained at 6.32% in FY 2021/22: NRB

KATHMANDU: Nepal's annual average consumer price inflation remained at 6.32% in the fiscal year 2021/22 compared to 3.60% a year ago, according to macroeconomic and financial situation report based on annual data released by Nepal Rastra Bank (NRB). Global rise of fuel and food prices, supply chain disruptions and devaluation of Nepali currency with US dollar contributed to building up inflationary pressures during the second half of 2021/22, according to the central bank's data. According to NRB, the Central Bureau of Statistics (CBS) has estimated economic growth of 5.84% for 2021/22. Agriculture, industry and service sectors are estimated to grow 2.30%, 10.19% and 5.93% respectively. In the review year, merchandise imports increased 24.7% to Rs 1920.45 billion compared to an increase of 28.7% a year ago. Destination-wise, imports from India, China and other countries increased 23.5%, 13.2%, and 36.3% respectively. Imports of petroleum products, medicine, crude palm oil, sponge iron, gold, among others, increased while imports of MS billet, cement, rice/paddy, pulses, medical equipments & tools, among others, decreased in the review year. During 2021/22, merchandise exports increased 41.7% to Rs 200.03 billion compared to an increase of 44.4% in the previous year. Destination-wise, exports to India and other countries increased 45.9% and 30.4% respectively while exports to China decreased by 20.4%. Exports of palm oil, woolen carpet, polyester yarn and thread, zinc sheet, juice, among others, increased while exports of soyabean oil, cardamom, tea, medicine (ayurvedic), wire, among others, decreased in the review year. Likewise, remittance inflows increased 4.8% to Rs 1007.31 billion during 2021/22 compared to 9.8% in the previous year. In US Dollar terms, remittance inflows increased 2.2% to 8.33 billion in the review year against an increase of 8.2% in the previous year. Similarly, Balance of Payments (BOP) remained at a deficit of Rs 255.26 billion in the review year against a surplus of Rs 1.23 billion in the previous year. In the US Dollar terms, the BOP remained at a deficit of 2.14 billion in the review year compared to a deficit of 3.1 million in the previous year. Gross foreign exchange reserves decreased 13.1% to Rs 1215.80 billion in mid-July 2022 from Rs 1399.03 billion in mid-July 2021. In US dollar terms, the gross foreign exchange reserves decreased 18.9% to 9.54 billion in mid-July 2022 from 11.75 billion in mid-July 2021. Based on the imports of 2021/22, the foreign exchange reserves of the banking sector is sufficient to cover the prospective merchandise imports of 7.8 months, and merchandise and services imports of 6.9 months. Broad money (M2) expanded 6.8% in 2021/22 compared to the growth of 21.8% in the previous year. Deposits at banks and financial institutions (BFIs) increased 9.0% in the review year compared to a growth of 21.4% in the previous year. Private sector credit from BFIs increased 13.1% in the review year compared to a growth of 27.3% in the previous year. The Total deposits at BFIs stood at Rs 5083 billion and private sector credit amounted to Rs 4621 billion. READ ALSO:

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