IANS

Kathmandu

Nepal has been suffering huge trade deficit due to an energy crisis, traditional agriculture system and higher remittances, according to a government study released yesterday.

The report prepared by Nepal’s ministry of commerce and supplies (MoCS) also concluded that the country recorded such a huge loss in foreign trade because the respective/line ministries did not promote their goods and services in the international market.

Nepal’s trade deficit reached $3.96bn in the first eight months of the fiscal year.

“Other line ministries have been found instrumental for the trade deficit than the MoCS itself,” reads the report.

Petroleum products, the largest import in the energy hunger country has played a crucial role in fostering the poor nation’s trade deficit.

Previous report from the country’s central bank has showed that Nepal’s total export earnings are not enough to finance import of petroleum products alone. The country imported petroleum items worth $270mn during the eighth month of the current fiscal year.

According to the report, the import of petroleum products and other energy generating items including battery, inverter and generators have made the largest contribution to the overall trade loss.

The report further said that due to the lack of capital and technology for the commercialisation of agriculture, the country is forced to increase the import volume of food commodities, further aggravating the trade deficit.

Nepal has already imported agricultural items including rice, maize, edible oil and vegetables worth $380mn during the eighth month of the current fiscal year.

According to the report, the growing inflow of remittance, which enhanced the lifestyle of Nepalis, has contributed to the imports of luxury goods including vehicles, cosmetics, jewelry, mobile and gadgets and other unproductive goods.