Kathmandu, Mar 22 (PTI) Prime Minister Sher Bahadur Deuba on Tuesday directed government officials to promote policies that could help reduce the country’s widening trade deficit.
“As the country’s trade deficit has posted a dismal picture, it is high time to adopt appropriate measures to reduce it,” Deuba said while addressing a meeting of the high-level Development Problem Solving Committee.
He advised the government departments to increase the consumption of local products and increase electricity consumption through the use of electric vehicles and electric stoves.
“We have to increase electricity consumption to reduce huge money being spent on import of petroleum products,” Deuba said.
Since the beginning of the current fiscal year, the country has been witnessing a worsening balance of payments situation and a critical liquidity crunch in the country’s banking sector.
After there was a drop in the COVID-19 cases, import has been inflating every month.
According to the Department of Customs, Nepal’s trade deficit increased 34.50 per cent to Rs 1.160 trillion during mid-July 2021 and mid-March 2022.
The government enforced various measures like making the importers maintain up to 100 per cent cash margin while opening a letter of credit account on import of 47 items and reduction in the quota on gold import to 10 kg daily, among others.
However, the government policies have failed to result in any remarkable drop in the country’s import expenses.
In the review period, Nepal’s import figure soared 38.64 per cent to Rs 1.308 trillion against export earnings of just Rs 147.74 billion. PTI SBP CPS CPS
