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.

Nepal's total foreign trade, however, recorded a sound growth of 13.5 percent and touched 236.36 billion rupees (3.23 billion dollars) during the period, according to the report.

In 2004-05, the country's total foreign trade was 208.17 billion rupees (2.85 billion dollars).

According to NRB, the total exports registered a growth of 4.2 percent compared to an increase of 8.9 percent in 2004-05. Exports accounted for 10.5 percent in total Gross Domestic Product (GDP), in comparison to 11 percent a year earlier.

The total imports increased by 17.1 percent in 2005-06 compared to an increase of 9.7 percent a year earlier. The share of imports in GDP rose to 30 percent in 2005-06 from 28 percent a year earlier.

Out of total imports, imports from India soared by a whopping 23.3 percent in 2005-06 in comparison to a growth of 12.6 percent last year. Imports from other countries, on the other hand, rose by 8.2 percent in comparison to a growth of 5.7 percent a year earlier.

The significant rise in imports from India has been ascribed to the rise in the import of petroleum products by 26.3 percent in 2005-06. Petroleum products currently constitute 30.8 percent of total imports from India.

Other imports from India that took an upward trend included rice,thread, medicine, chemical fertilizers and hot rolled sheet in coil,among others.

With respect to overseas countries, the major imports comprised of palm oil, crude palm oil, polythene granules, textile dyes and electrical goods.

Source: Xinhua