Nepal’s Inflation Remains Within Expected Ceiling, Remittance Inflows Surge

Nepal’s annual average inflation stood at 5.44 percent in the last fiscal year, remaining within the expected ceiling, according to the “Current Macroeconomic and Financial Situation of Nepal” report released by the Rastra Bank today.

The report highlights a 1.2 percent decrease in imports and a 3 percent decline in exports over the last fiscal year. This marks an improvement compared to the previous year when imports and exports fell by 16.1 percent and 21.4 percent, respectively.

Remittance inflows saw a significant increase of 16.5 percent, reaching Rs. 1,445.32 billion. However, this growth rate was slightly lower than the 23.2 percent increase recorded in the previous year. In US Dollar terms, remittance inflows rose by 14.5 percent to USD 10.86 billion, compared to a 13.9 percent increase in the previous year.

The balance of payments recorded a surplus of Rs. 502.49 billion, up from a surplus of Rs. 285.82 billion in the previous year. Gross foreign exchange reserves stood at USD 15.27 billion, sufficient to cover 13 months’ worth of merchandise and services imports.

Broad money (M2) expanded by 13.0 percent, while deposits at Banks and Financial Institutions (BFIs) also increased by 13.0 percent. Private sector credit grew by 5.8 percent during the review year, with total deposits at BFIs amounting to Rs. 6,452 billion and private sector credit reaching Rs. 5,074 billion.