Impact of Trade Deficit in Nepalese Economy : Deficit in Merchandise Trade

Abstract

The aim of this thesis is to find out more information about the economic performance of Nepal and impact on the economy that has been raised by foreign trade. The thesis further studies the causes of trade deficit in Nepal. The main causes of trade deficit are geographical structure, political instability, exchange money rate and remittance. The trade deficit impacts directly on economic performance of the country. It actually has an impact on GDP of the nation, supply side, interest rate, price of commodities and FDI. The thesis furthermore analyses the challenges of trade and PEST analysis of the Nepal. Lack of having a sea port in the country and good infrastructures of development are the major challenges that Nepal has to overcome in terms of trade. The thesis discusses the relationship with the major trading partner of Nepal and other countries as China and Japan. Besides this, quantitative research method is used in this thesis paper. Information in this thesis is collected from secondary source of data.