Balance of Profit recorded surplus of Rs 249.1 million

After about two years of continued deficit, balance of payment (BoP) has recorded a surplus of Rs 249.1 million during the eleven months of 2010/11. The BoP deficit had touched Rs 22 billion in the previous year.

Likewise, inflation that was well in double digit till a couple of months ago has moderated to 8.8 percent in mid-June, according to Nepal Rastra Bank (NRB) that released the macro-economic report for the first 11 months of the last fiscal year.

The central bank has attributed the improvement in BoP to slowed growth of trade deficit, rise in grants and pension receipts, among others.

"Remittances from Nepalis in overseas jobs increased by 10.1 percent to Rs 229.52 billion during the period," says the report. Likewise, foreign direct investment (FDI) inflow also shot up to Rs 6.06 billion, which was Rs 2.41 billion in the same period of the previous fiscal year.

As a result, country´s gross foreign exchange reserves increased by 0.3 percent to Rs 269.77 billion in mid-June 2011 from a level of Rs 268.91 billion as at mid-July 2010.

Of the total reserve, NRB´s reserve rose by four percent to Rs 213.54 billion in the review period from a level of Rs 205.37 billion as at mid-July 2010.

Likewise, the report states that the year-on-year inflation as measured by the consumer price index increased to 8.8 percent in mid-June 2011. It was 9.6 percent in mid-May and 10.6 percent in mid-April.

The central bank has attributed it to nominal drop in prices of food items during the month.

According to the report, prices of foods and beverages increased by 14.3 percent in mid-June. A month ago, the prices of food items had gone up by over 16 percent. The prices of non-food items and services also rose by 4.3 percent during the period.

Of the food items, the price of vegetables shot up by the highest rate of 46.6 percent compared to the fall by 13.4 percent during the corresponding period the previous year. The price of fruits and sugar and sweets also increased by 28.2 percent and 23.4 percent respectively during the review period.

The prices of tobacco products and cereal grains increased by 15.3 percent and 10.4 percent respectively over the period.

Within the group of non-food and services, the prices of clothing and footwear increased by 14.7 percent over the review period compared to the price recorded during corresponding period the previous year.