At a time when economists have been saying that the economy of the country is passing through a very difficult turn, a senior government official has said that going by the current trend, it will be difficult for the government to meet the revenue target in the current fiscal year.

Making public the half-yearly report on ‘Current Macroeconomic Situation’, Governor of the Nepal Rastra Bank (NRB) Bijaya Nath Bhattrai said that overall revenue mobilization of the government grew by a meagre 5.7 percent to Rs 31.6 billion in the first six months, whereas the budgetary target was to achieve 14 percent growth in 2005/06, according to reports.

The report says that non-tax revenue decreased by 12.1 percent to Rs 4.95 billion from Rs 5.6 billion of the same period last year.

Furthermore, revenue collection from customs recorded a decline of 5.8 percent and stood at Rs 7.025 billion during the period. It was Rs 7.4 billion in the same period last year.

According to the report, inflation based on consumer price index grew by seven percent during the period, as compared to 4.6 percent of the same period last year.

The report portrays similar picture on the foreign trade situation. According to the report, the trade deficit soared by 27.1 percent to Rs 55.4 billion.

The trade dependency with India increased further during the period. Of the total exports, Indian trade accounted for 69.5 percent, while imports from India made up 61.8 percent.

The overall imports of the country during the period rose by 22.5 percent to Rs 87.91 billion, whereas the export inched up by 15.1 percent to touch Rs 32.50 billion.

The growth in domestic credit declined to 4.3 percent in the current fiscal compared to a growth of 5.7 percent in the previous year. Money supply in this period also remained at 4.6 percent only compared to a higher growth of 11.5 percent in the previous fiscal year, said the NRB report.

The average growth rate of price index from mid-February 2005 through mid-January 2006 also stood at seven percent. The price index of food and beverages group moved up by 8.2 percent compared to an increase of 3.4 percent in the same period of the previous year.

The country saw an increase of 9.8 percent in the gross foreign exchange reserve in mid-January as compared to that recorded in mid-July. The reserve in mid-January was Rs 142.6 billion.