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By Sandeep Chaudhary

Nepal's External Sector Rebounds in Mid-June 2024/25 with Record Export Growth

Nepal's External Sector Rebounds in Mid-June 2024/25 with Record Export Growth

Nepal's external sector has shown a significant turnaround by mid-June of the fiscal year 2024/25, with a remarkable rise in exports and a modest uptick in imports, according to fresh data released by Nepal Rastra Bank.

Exports surged to Rs. 247.6 billion by mid-June 2024/25, reflecting a staggering 77.8% growth compared to the same period last fiscal year. This marks a strong recovery from previous years of contraction—particularly the 21.4% decline in 2022/23 and the flat -3.0% growth seen in both the annual and mid-June figures for 2023/24. The export volume now not only exceeds pre-pandemic levels but has reached an all-time high, underlining improved trade competitiveness, diversification of export goods, or favorable external market conditions.

On the import side, Nepal recorded a total of Rs. 1,644.8 billion in goods brought into the country by mid-June 2024/25. This is a 13.1% rise from the mid-June figure of the previous year (Rs. 1,453.7 billion), reversing the declining trend seen in 2022/23 (-16.1%) and the slight contraction of -1.8% in mid-June 2023/24. The rise in imports suggests a possible rebound in domestic consumption and industrial activity, supported by improved liquidity or remittance inflows.

Despite the persistent trade deficit, the narrowing gap between export and import growth rates is noteworthy. In particular, the growth rate differential for mid-June 2024/25—export growth at 77.8% versus import growth at 13.1%—signals a healthier progression toward balancing Nepal's trade structure. If such trends persist, they could contribute positively to the country’s current account balance and reduce external sector vulnerabilities.

In summary, the external sector data indicate a robust recovery in exports and a controlled rise in imports as of mid-June 2024/25, portraying improved economic dynamism and trade performance for Nepal.

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