Finance Minister claims to achieve nearly double-digit growth, despite coronavirus threat

 Nepal is hardly hit by the coronavirus threat and Finance Minister Dr Yuba Raj Khatiwada today claimed that the country will achieve economic growth close to double digits in the current fiscal year.

Addressing the third International Conference on Economics and Finance organised by the central bank today, the finance minister even claimed that the economic indicators in fiscal 2019-20 are positive so far, which will trigger higher economic growth.

“Our programmes, policies and plans are focused on alleviating poverty and achieving Sustainable Development Goals (SDGs),” he said, adding that as indicators of the economy are positive, the country will record economic growth close to double digits this fiscal year.

Initially, the government – in the budget for the current fiscal year – had set 8.5 per cent economic growth. However, the finance minister is still optimistic about meeting the growth target, despite his own decision to revise the budget downward by Rs 147 billion for the current fiscal year. In the mid-term review of the budget for fiscal year 2019-20, he had revised the budget downward to Rs 1.385 trillion from the initial budget of Rs 1.532 trillion. He has not only revised the budget size downward, but also the revenue mobilisation target and expenditure projections. 

Despite the high optimism of the finance minister, senior resident representative of International Monetary Fund (IMF) to Nepal, India and Bhutan Luis E Breuer – addressing the central bank conference – said that higher economic growth in the present context is not possible for Nepal.

“Though Nepal has the prospect to grow higher with favourable policies, the country is expected to witness only five to six per cent economic growth this year based on today’s policies,” he added.

On the occasion, central bank governor Dr Chiranjibi Nepal said that it is challenging to achieve the economic growth target due to the negative impact of the coronavirus outbreak.

Former vice chairman of National Planning Commission (NPC) Dr Swarnim Wagle – citing that Nepal’s economy could not progress in line with the social and political transformation in recent years – said that achieving higher economic growth is unrealistic. “We have not been able to build a strong and proper base to achieve higher economic growth,” he added.

The central bank is organising the two-day conference to discuss economic and financial sector issues with policymakers, practitioners and researchers. The conference will discuss on macroeconomic policies, macro prudential policies, macro-financial linkages, fiscal federalism, public finance, decentralisation, globalisation, international trade and exchange rate regimes.

Likewise, the conference will also discuss on capital flows, remittance, business cycle, inclusive growth, poverty reduction, income inequality, unemployment, education, health, labour, tourism, energy, payment system, FinTech, RegTech, SupTech, cyber security, financial inclusion, financial access, microfinance finance, green financing, financial development, financial stability, financial consolidation and capital market development, according to the central bank.