We expect the merchandise trade account to remain in deficit in 2011-12 as growth in imports outpaces that in exports by a considerable margin. In addition, continued political uncertainty in Nepal, which will limit the number of visitors to the country from developed nations, means that tourism receipts, which have historically given additional support to the balance of payments, will not have as great an effect in 2011-12. A sustained rise in inflows of remittances from Nepali workers overseas (albeit slower than previously) will provide limited support to the current account, but we expect the balance of payments to remain in deficit in 2011-12.