Nepal has witnessed significant strides in its economic landscape, marked by a surge in remittances, bolstered Balance of Payments (BoP), burgeoning reserves, and a notable dip in inflation. The Nepali month of Poush, spanning from December 17, 2023, to January 14, emerged as a period of prosperity, with remittances amounting to nearly Rs 120 billion flooding into the country.
The latest half-yearly financial statement released by the Nepal Rastra Bank underscores the magnitude of this economic upswing, with remittances totaling Rs 119.97 billion during the aforementioned month alone. This influx catapulted the cumulative remittance inflow for the first six months of the ongoing fiscal year to an impressive Rs 733.22 billion.
Of particular significance is the 22.6 per cent surge in remittances denominated in US dollars over the same period. The influx of USD 5.52 billion in remittances during the initial half of the fiscal year underscores the substantial contribution of Nepali migrant workers to the country’s economy.
Moreover, the rise in remittances has also fueled an uptick in the Balance of Payments, as anticipated, coupled with a noteworthy reduction in the trade deficit. Concurrently, Nepal’s foreign exchange reserves have experienced a robust expansion, currently standing at Rs 1.816 trillion. In terms of US dollars, the foreign exchange reserve registers at a commendable USD 13.69 billion, reflecting an 18 per cent surge compared to mid-July 2023.
Amidst this economic buoyancy, Nepal witnessed a commendable moderation in consumer price inflation during mid-January 2024, marking a positive deviation from the previous year’s figures. The year-on-year inflation rate descended to 5.26 per cent, down from 7.26 per cent recorded a year ago, indicative of a favorable trajectory in the nation’s economic dynamics.