May 12
Weekly Economic Update (6 May 2022 to 12 May 2022)
1. Curbing imports hit revenues — The government’s efforts to restrict imports amid depleting foreign exchange reserves and surging balance of payment deficit have started to hit the government’s revenues. As of 7 May 2021, the Department of Customs collected a total revenue of NPR 419 billion against a target of NPR 431 billion. [i]
2. NPR slides to all time low against USD — The Nepali currency slid to an all-time low against the US dollar with Nepal Rastra Bank (NRB) fixing the price of the USD at NPR 123.65 per dollar on 10 May 2022. [ii]
3. Remittances down by 0.6% — Nepal received remittances worth NPR 93.55 billion in the ninth month of the current FY. The overall remittance inflows have decreased by 0.6% to NPR 724.74 billion in the first nine months of the current FY compared to the same period of the previous FY. [iii]
4. Inflation in Nepal stands at 7.28% — The y-o-y consumer price inflation stood at 7.28% in the ninth month of 2021/22 compared to 3.10% a year ago. The NRB has stated that food and beverage inflation stood at 7.40%, whereas non-food and service inflation stood at 7.18% in the ninth month of FY 2021/22. [iv]
5. Balance of Payment (BoP) deficit widening despite tightening of imports — According to NRB, Nepal’s Balance of Payment (BoP) remained at a deficit of NPR 268.24 billion in the first ninth months of FY 2021/22. The country’s BoP was at a surplus of NPR 42.54 billion during the same period of the previous FY. [v]
6. Nepal’s Foreign Reserves further dwindle — Nepal’s foreign exchange reserves have declined by 16.5% in the first nine months of FY 2021/22. According to NRB’s latest macro-economic situation report, the country’s forex reserves declined to NPR 1167.92 billion in mid-March 2022 from NPR 1399.03 billion in mid-July 2021. [vi]
7. Nepal to ask India to develop West Seti project — Nepal has decided to hold talks with India for the development of the West Seti Hydropower Project, which has remained in hibernation for six decades over investment concerns. [vii]
8. FNCCI suggests imposing up to 42% customs duty on agriculture product imports — To reduce the growing imports of agricultural goods, the Federation of Nepalese Chamber of Commerce & Industries urged the government to impose a customs duty of up to 42% on the import of agricultural products that are produced in Nepal. [viii]
9. Sastodeal partners with UNCDF and SDC to empower 3,500 MSMEs — With a combined funding of USD 100,000, Sastodeal, the Swiss Agency for Development and Cooperation (SDC), and the UN Capital Development Fund (UNCDF) signed a new partnership agreement to help 3,500 micro, small and medium enterprises (MSMEs) in Nepal digitize their operations. [ix]
10. Nepal slips in global mobile broadband speed ranking — As per the Speedtest Global Index, Nepal slipped to the 109th spot among 142 countries in mobile broadband speed in May 2022. Nepal was in the 88th position in May last year. [x]
