Nepal’s foreign trade plummets: imports surge, exports stagnate

KATHMANDU: Nepal finds itself grappling with a disheartening scenario in its foreign trade, marking a troubling trend in the third quarter of the current fiscal year. According to data from the Department of Customs (DoC), the nation witnessed a stark contrast between its import and export figures, painting a concerning picture of economic performance.

In the past month alone, Nepal’s imports skyrocketed to a staggering Rs 137 billion, sharply contrasting with the lackluster total export earnings of merely Rs 113.94 billion over the entire nine-month period. This glaring gap underscores the imbalance between the nation’s spending on imports and its earnings from exports.

The data further reveals a concerning downturn in both imports and exports over the first nine months of FY 2023/24. Import expenses dwindled by 2.84 percent, amounting to Rs 1.167 trillion, while export earnings suffered a 3.66 percent decline, totaling Rs 113.94 billion. This downward trajectory underscores a broader economic slowdown plaguing the nation’s trade sector.

A closer examination of monthly comparisons sheds light on the severity of the situation. Nepal witnessed a notable decline of Rs 6 billion (four percent) in imports over the past month, compared to the corresponding period last year. During the same timeframe last year, the country had incurred import expenses amounting to a whopping Rs 143 billion.

Similarly disheartening, the nation’s export figures also witnessed a decline in the past month. Exports were valued at a modest Rs 13.32 billion, marking a slight dip from the Rs 13.48 billion recorded in the equivalent period last year. This stagnation in export performance underscores the challenges faced by Nepal in stimulating demand for its goods and services in the international market.

The collective impact of declining imports and exports has resulted in an overall trade decrease of 2.92 percent, reflecting the broader economic woes faced by the nation. Despite the silver lining of a reduction in trade deficit by 2.75 percent due to the substantial fall in imports, Nepal’s trade landscape remains fraught with challenges.

Economic analysts attribute this dismal performance to the prevailing economic slowdown, which has cast a shadow over both domestic and international trade activities. Despite efforts by financial institutions to stimulate economic activity by slashing interest rates, the lack of demand for loans has left them grappling with substantial surpluses of loanable funds.

As Nepal navigates these turbulent economic waters, policymakers face the daunting task of implementing measures to reignite trade momentum and stimulate economic growth. The road ahead remains uncertain, with the nation’s economic fortunes intricately tied to its ability to address the systemic challenges plaguing its trade sector.