Economic situation bleak: Opposition

The opposition today pointed out a scary economic future with rising prices, and declining employment and income if the current situation persists.

In an interaction programme on the current economic situation, opposition parties expressed that the pessimistic investment environment in the country has propelled capital flight along with migration of young and able workforce.

“In the current situation, remittance is growing and deposits in banks have increased causing excessive liquidity which has led to slashing of deposit rates considerably due to which the real interest rate has become negative,” pointed out former finance minister and CPN-UML leader Surendra Pandey, expressing such negative interest will lead to more unnecessary and unproductive expenditure leading to more inflation.

The current government is unable to spend even the earmarked capital expenditure as shown by the government’s account which is surplus by more than Rs 32 billion. Such a scanty expenditure rate is a testimony that economic growth rate, and growth in income and employment will contract in the days to come.

Last year, Nepal witnessed a growth of 4.5 per cent mostly due to bumper harvest but this fiscal year the same windfall might not be repeated. “Farmers could not acquire fertilisers during plantation which is a sure sign that agriculture production will be down this year. Moreover, farmers will be the ones who will be affected the most,” said Pandey, who was one among the three former finance ministers, who prepared the current economic situation report.
The opposition also pointed out the dismal industrial sector situation as investment has been diverted from Nepal as the investment climate of Nepal has deteriorated in the past decade. In fiscal year 2001-02, industrial growth rate was recorded at 8.5 per cent which in 10 years has gone down to 6.8 per cent, signaling the pathetic manufacturing situation, said Pandey.

Likewise, the opposition also called attention to the need for improving Nepal’s external trade situation. Nepal is importing goods and services worth Rs 387.4 billion while its export is a mere Rs 75 billion. “Nepal’s import bill for petroleum products alone is Rs 18 billion more than its total exports,” pointed out Pandey.