Abstract

Author:
Dilina Nepal, Maheshwor Adhikari

Doi: 10.26480/jtwe.02.2024.69.75

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

The objective of this paper is to study and analyze the persistent challenge of trade deficit within the Nepalese economy and its multifaceted implications. In the fiscal year 2022/23, Nepal exported the goods worth Rs 157.14 billion and imported the goods worth Rs 1611.732 billion leading to a trade deficit of Rs 1454.59 billion. Trade deficit have detrimental effect on economic growth and GDP of a country. Despite, Nepal’s concerted efforts to integrate into the global market through various trade agreements and memberships the trade deficit continues to be a significant barrier to long-term economic growth. This paper provides important insights into Nepal’s complex commercial landscape through a thorough investigation of trade dynamics, import-export patterns, and the underlying reasons contributing to the imbalance. It highlights the major obstacles to closing the trade gap as the nation’s high reliance on imports, which are made worse by insufficient export diversification and structural limitations. Furthermore, a detailed analysis of the crucial roles played by remittances, industrial stagnation, and the requirement for foreign investment is presented, highlighting crucial areas that require attention.