Increase in imports is widening the Nepal’s trade deficit; there is a need to take urgent measures to jack up export
The only solace is an increase in remittance, which has for years helped keep the country’s economy afloat. As per the report, the workers’ remittances have increased by 37.3 per cent to Rs 242.17 billion in the review period compared to a growth of 2.6 per cent in the same period of last fiscal year. But to address the widening trade deficit, the country cannot rely on remittances forever. Immediate measures have to be taken to plug the BoP deficit. The problem, however, is there are certain items which Nepal cannot forgo. The report says the import of commodities like petroleum products, aircraft and spare parts, MS billet, vehicles and spare parts and other machinery items increased significantly in the review period. In the light of these facts, the only way Nepal can narrow the trade deficit is by jacking up exports. Nepal has increasingly become an import country. With a weak industrial and manufacturing base, lack of focus on the agricultural sector and failure to identify the exportable products with a competitive edge, the country’s import has refused to slow down. With sluggish growth of export, the country’s trade deficit has been ever widening.
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