The Impact of Trade Deficits and the Burden of Crisis Oriented Economy on the Livelihoods of Nepali People

Uttam Khanal(Humanities and Social Sciences, Tribhuvan University, Kathmandu, 44600, Nepal)

Abstract

29,164,578 people are living in Nepal. Out of them, 48.96% are men and 51.04% are women. The growth rate of the population is 0.93% annually. However, 216,957 individuals had been abroad for employment, education or other reasons. It has developed an addiction to imported products using remittances. The government delays spending the money allotted for capital improvements. The debt incurred by loans received from donors exceeds between 20 trillion and 80 billion of Nepal’s entire yearly budget. Based on statistics from Nepal Rastra Bank fiscal years 2021/2022, export and import contributions to overall Nepal’s foreign commerce were 8.40% and 91.60%, respectively. Due to the burden of debt and increasing trade deficit in the Nepalese economy, it has greatly affected the livelihood of the people. The increase in the prices of goods has made the lives of ordinary and low-income citizens very difficult. To reduce it, it is necessary to increase the production of indigenous products and promote their trade. Nepal needs to improve its ability to balance imports and exports. Economic dependency will reduce and the nation’s focus on self-sufficiency will increase if the market is extended by raising the output of locally produced items. There will be an increase in hazards as the state’s ability to function weakens. No nation can be entirely self-sufficient in the open global market of today by producing all the commodities and services it requires. Economic dependency will reduce and the nation’s focus on self-sufficiency will increase if the market is extended by raising the output of locally produced items. There will be an increase in hazards as the state’s ability to function weakens.

Keywords

Import; Export; Domestic product; Raw materials; Trade deficit; Production and consumption

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DOI: http://dx.doi.org/10.26549/mmpp.v5i3.15879