For many years, Nepalese government was focused on containing the violence and political stability in the country. So, the country’s economy is I a miserable condition. This reality has now been reflected again in the growing trade balance. People's Daily Online reported:
“Due to higher rate of growth in imports compared to exports, Nepal registered a substantial rise in trade deficit of about 114 billion Nepali rupees (1.56 billion US dollars) during the fiscal year 2005-06 which ends in mid-July.
The trade imbalance continues to rise due to swelling imports vis-a-vis sluggish exports, as it rose by an overwhelming 25.5 percent in 2005-06 compared to the growth of 10.2 percent in 2004- 05, a report issued here on Sunday by Nepal Rastra Bank (NRB), the central bank of the country stated.”
Increase in import is never a good thing for any country. Nepalese government has to focus on its own economy more. Nepal cannot afford to have its trade deficit go out of hand. However, the only consolation for Nepalese economy is that its foreign exchange reserve has increased 27%.
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