Political
stability could spur the economic growth, according to a multilateral donor.
Since politics
has long been eclipsing economic agenda, Nepal needs to shift its focus to economic
development while letting political process settle itself on due course, country
director of the World Bank for Nepal and Bangladesh Johannes Zutt said, during an
interaction in the Valley here today. " However, promotion of private
sector investment, infrastructure development and reforms in the financial
sector will ensure robust growth," he added, releasing World Bank's half-yearly
macro economic report 'Nepal Development Update 2013'.
The World Bank
report has also claimed that Nepal is heading toward economic recovery with a growth
between four per cent and 4.5 per cent this year – though the forecast is a
conservative one – up from last year’s 3.6 per cent.
If the
country will be able to remove some of the bottlenecks in development of
energy, transportation and financial sectors, Nepal can easily to move up to a
higher growth trajectory, it added.
Though,
Nepal is heading towards the recovery, it has to focus on energy generation,
transport development to support trade and consolidate the financial sector, Zutt
said, adding that the recent depreciation of Nepali rupees against the US
dollar remains a concern but need not create a panic.
Reiterating World
Bank's long standing stand on no need to change fixed currency peg with Indian
rupee, he said that such a major policy shift should be based on clear policy
objectives and in-depth analysis of likely economic outcome, including the
long-term impact on Nepal's trade competitiveness.
The senior country
economist at the World Bank’s Nepal office Aureilien Kruse, on the occasion, said that
the timely election will ensure the economic growth and could contain the inflation
in single digit.Though, its challenging to contain inflation in an election
year, Nepal's inflation mostly depends on India's, where it is not very high
and increased supply of food grains due to favourable monsoon will also support
in taming inflation, he said, adding that Nepal suffered from under-investment from both
the public and private sectors.Nepal’s public investment declined 19.2 per cent in the fiscal year 2011-12 and 18.8 per cent in the last fiscal year 2012-13, the World Bank report stated.
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