Inflation in the first 11 months of last fiscal year 2001/02 dipped to 3 percent from 3.5 percent compared to the same period the previous year. Total exports fell 12.7 percent to Rs. 44.32 billion and imports declined 8.1 percent to Rs.96.88 billion.

Trade deficit fell 3.5 percent to Rs. 52.56 billion. Foreign exchange reserve declined marginally 0.1 percent to Rs.103.5 billion until mid June 2002 but was still enough to finance imports for one year; 73 percent of the reserve was in convertible currencies compared to 77 percent the previous year.

Total government expenditure increased by only 4.1 percent to Rs.57.95 billion compared to a 18.3 percent rise during the same period the previous year; regular expenditure increased 10.2 percent to Rs.40.56 billion to meet heightened security needs.

Development expenditure fell 11.4 percent to Rs.15.83 billion compared to a rise of 13.6 percent the previous year. Revenue collection increased 2.4 percent to Rs.42.14 billion. Budget deficit increased  0.6 percent to Rs.11.33 billion; the deficit was financed by foreign cash loan of Rs.3.39 billion, development bond issues totaling Rs.3.87 billion, treasury bills of Rs.1.5 billion and Citizen Saving Certificates totaling Rs.628 million.

The government withdrew Rs.1.99 billion in overdraft  from Nepal Rashtra Bank to meet the remaining deficit. nepalnews.com br July 30