Nepal’s Trade Deficit Stands at Rs 987.39 Billion

Nepal’s trade deficit stood at Rs 987.39 billion in the first eight months of the current fiscal year (2024/25), reflecting a 6.2 percent increase compared to the same period last year.

According to the latest Current Macroeconomic and Financial Situation Report published by Nepal Rastra Bank on Wednesday, this rise in the trade deficit follows a 2.5 percent decline during the same period of the previous fiscal year when the central bank had enforced strict monetary measures to curb imports.

Despite the widening deficit, the export-import ratio improved to 13.8 percent, up from 9.8 percent a year earlier—indicating a relatively better export performance, although imports continue to dominate overall trade.

During the eight months of 2024/25, merchandise exports increased 57.2 percent to Rs 158.17 billion against a decrease of 4.0 percent in the same period of the previous year, the NRB report added. Destination-wise, exports to India, China, and other countries increased 82.5 percent, 8.8 percent, and 2.9 percent respectively.

Exports of soybean oil, polyester yarn, thread, tea, particle board, and cardamom, among others increased whereas exports of palm oil, zinc sheet, ginger, readymade garments, and juice, among others decreased in the review period, the report further stated.

Meanwhile, merchandise imports during the review period increased 11.2 percent to Rs 1145.57 billion against a decline of 2.7 percent a year ago.

Destination-wise, imports from India, China, and other countries increased 7.9 percent, 12.5 percent, and 20.6 percent respectively.

According to the central bank, imports of crude soybean oil, rice/paddy, transport equipment, vehicle and spare parts, edible oil, sponge iron, among others increased whereas imports of petroleum products, crude palm oil, and aircraft spare parts, writing and printing paper, and chemical fertilizer among others decreased in the review period.

During the eight months of 2024/25, merchandise imports from India against payment in convertible foreign currency amounted to Rs 119.49 billion. Such amount was Rs 98.29 billion in the same period of the previous year.

As per the Broad Economic Categories (BEC), the intermediate and final consumption goods accounted for 35.2 percent and 64.0 percent of the total exports respectively, whereas the ratio of capital goods in total exports remained 0.7 percent in the review period.

In the same period of the previous year, the ratio of intermediate, capital, and final consumption goods remained 57.0 percent, 0.27 percent, and 42.8 percent of total exports respectively.

On the imports side, the share of intermediate goods remained 51.6 percent, capital goods 8.9 percent, and final consumption goods 39.6 percent in the review period. Such ratios were 49.5 percent, 8.9 percent, and 41.6 percent respectively in the same period of the previous year, added the report.

Nepal’s trade deficit stood at Rs 987.39 billion in the first eight months of the current fiscal year (2024/25), reflecting a 6.2 percent increase compared to the same period last year.

Meanwhile, merchandise imports during the review period increased 11.2 percent to Rs 1145.57 billion against a decline of 2.7 percent a year ago.

Destination-wise, imports from India, China, and other countries increased 7.9 percent, 12.5 percent, and 20.6 percent respectively.

In the same period of the previous year, the ratio of intermediate, capital, and final consumption goods remained 57.0 percent, 0.27 percent, and 42.8 percent of total exports respectively.