The deficit soared to 33.34 percent in 2013-14, against 15 percent 2004-05, according to the Ministry of Commerce and Supplies.

The deficit likely widened further at the end of the last fiscal year 2014-15. As of the first 11 months of the last fiscal year, the trade deficit stood at Rs616 billion.

Exports as percentage of GDP in 2013-14 was 4 percent against 10 percent in 2004-05, while imports rose to 37.4 percent in 2013-14 against 26.6 percent in 2004-05, according to the ministry.

The ministry said increased expenses on petroleum products, food and luxury goods, and sluggish growth in energy production and agro products were the main reasons for the increased deficit.

Given the pathetic exports situation, the commerce ministry held a meeting on Sunday with other ministries, including Ministry of Finance, Ministry of Agriculture Development and Ministry of Energy to discuss the matter.

Commerce ministry Secretary Naindra Prasad Upadhyaya said his ministry urged the other ministries to find a way out to reduce the growing expenses on unproductive consumption.

The ministry said three major components — import of petroleum, agricultural products and luxuries and non productive goods — contribute around 50 percent to the import.

“Petroleum imports cover 23 percent, agro products’ share is 20 percent, while luxury products cover around 7 percent of the total import value,” said Upadhyaya.

Nepal imported agricultural products worth more than Rs69 billion in the first 11 months of the last fiscal year. These included rice, edible oils, vegetables, maize, oilcakes, dairy products, live animal and apple.

The country also spent more than Rs39 billion for the imports of luxury products during the period. These included gold, silver and diamond, cosmetics, furniture, energy drinks and liquor.  

Poor irrigation facility and disruption in power supply have been identified as the main reasons for the slowdown in the agriculture sector.

Slow progress in hydropower generation as a result of structural deficiency has been blamed for increasing petroleum imports.

The ministry said increasing consumerism as a result of rising remittance is leading to higher imports. The ministries concerned should introduce policies to divert the remittance and excess liquidity with banks towards the productive sector, according the ministry.

Upadhyaya also said the imports could rise further this year for the reconstruction purposes.