KATHMANDU, Aug 9: Despite 14 percent rise in exports, Nepal´s trade deficit soared by 26 percent and crossed over Rs 419 billion in 2011/12 as imports of items like petroleum products, iron and steel and gold rose significantly.
The annual trade data showed the country´s total exports stood at Rs 73.64 billion.
However, imports rose by far higher rate of 24 percent to Rs 492.5 during the year. Trade experts attributed the ballooning trade deficit to the country´s weakening supply capacity due to slowing industrial sector that has been plagued by persisting power shortage and frequent labor unrest.
The data compiled by Trade and Export Promotion Center (TEPC) showed that imports of petroleum products - the largest import item - rose to Rs 96.38 billion during the year from Rs 75.75 billion of a year ago, largely due to rising number of vehicles and prolonged power outage that pushed up the demands of fossil fuel as an alternative energy source.
Similarly, imports of iron and steel products - the second largest import, shot up to Rs 49.6 billion, up by Rs 7.5 billion compared to previous fiscal year´s figure. However, imports of machinery and parts, third largest import, fell marginally to Rs 26.06 billion from Rs 26.65 billion the previous year.
Though the government has regulated the sales of gold, its imports skyrocketed by 140 percent to Rs 25.77 billion in 2011/12.
The imports of gold shot up significantly as the government loosened the grip on import of the precious metal allowing daily import of gold to 15 kg through the banks from the review year, up from10 kg set couple of years back. During the fiscal year 2009/10, gold import recorded all time high worth Rs 41.45 billion prompting the government to tighten the screw in gold imports in a bid to bring down the spiraling trade deficit.
Import of transport vehicles and parts, which has been overtaken by gold as the fourth largest imports, also suffered a decline to Rs 23.87 billion from Rs 24.22 billion.
In the export front, most of the major exportable items saw a rise during the review year. Iron and steel products maintained its position of the largest export item with total volume being Rs 11 billion during the year 2011/12. The amount was Rs 9.7 billion during the earlier fiscal year.
Similarly, exports of yarns (polyester, cotton and others)- the second largest export, rose to Rs 6.32 billion from Rs 5.54 billion, woolen carpet to Rs 5.97 billion from Rs 4.92 billion, textile to Rs 5.22 from Rs 3.7 billion. However, exports of readymade garment inched down marginally to Rs 4.01 billion from Rs 4.08 billion.
Lentil which was the fifth largest export during the fiscal year 2010/11 with Rs 3.34 billion, dropped to seventh position with Rs 2.49 billion during the fiscal year 2011/12.