Economy to grow by 3.87 per cent, per capita income reaches $1456

The economy is going to grow by only 3.87 per cent at the consumer's price, in the current fiscal year.

According to National Statistics Office (NSO), the gross domestic production (GDP) is estimated to grow by 3.87 per cent despite the government's target of 6 per cent.

The economy will grow by 3.54 per cent at constant price in the current fiscal year, the report launched today reads.

Earlier, the government has projected the economy to grow by 4 per cent, whereas the World Bank (WB) has estimated it to grow by 3.3 per cent, the International Monetary Fund (IMF) by 3.1 per cent and Asian Development Bank (ADB) by 3.6 per cent due to slowdown in the economy.

Nepal’s economy will be the size of Rs 5.704 trillion by the end of the current fiscal year from Rs 5.348 in the last fiscal year, the report reads, adding that the per capita income is also expected to increase by $51 to $1456 in the current fiscal year from last fiscal year's $1405.

The increase in income is too low as Nepal is graduating to Developing Country (DC) status by 2026 from current Least Developed Country (LDC) status.

Due to the contraction in some sectors of the economy and the low capital expenditure has pulled the economic growth rate downwards, the report exposes.

Likewise, the report also shows that the share of service sector in the economy has reached 62.9 per cent. "The contribution of the secondary sector (industry-construction) is 12.5 per cent and the share of the primary sector (agriculture) is 24.6 per cent," it claims, adding that this fiscal year, the contribution of agriculture has increased slightly compared to last year, though the increase in agriculture sector alone cannot push the economic growth upwards.

Agriculture sector will grow by 3.05 per cent, while the non-agriculture sector will grow by 3.75 per cent, it adds.

The industrial sector has also contracted for the second year in a row due to the inability to increase production, according to the report. "This year, the industrial sector has contracted by 1.60 per cent, wheras last year there was a contraction of 1.98 per cent."

In 2021-22, the growth of the industry was 6.70 per cent, the report added estimating that there will be a contraction in the production of industries as there has been no significant improvement in the economy globally due to various adverse factors created in the economy in recent times.

Government, development partners launch Public Expenditure and Financial Accountability Assessments

Nepal has a robust legislative and institutional framework for public financial management, but further reforms are needed to strengthen fiscal and budget outcomes to support green, resilient, and inclusive development, says the third Public Expenditure and Financial Accountability (PEFA) Performance Assessment Reports.

The PEFA Performance Assessment Reports were jointly launched today by the government  with support from the Multi-Donor Trust Fund. The assessment is based on the internationally recognised PEFA Framework to assess the progress of Public Financial Management (PFM) across the government. Based on the assessments, the government will prepare a medium-term PFM Reform Strategy and Action Plan.

“Public financial management has the power to change people's lives and livelihoods,” finance minister Barsha Man Pun said, adding that Nepal is committed to establishing a strong and robust public finance system and transforming the public financial management landscape through rigorous reforms and adoption of digital governance.

The government partnered with the Nepal Public Financial Management Multi-Donor Trust Fund supported by Australia; European Union; the United Kingdom’s Foreign, Commonwealth, and Development Office; Norway; Switzerland; and U.S. Agency for International Development and administered by the World Bank to conduct the assessments. The reports consist of the PFM Performance Assessment, Climate Responsive PFM Performance Assessment, and Gender Responsive PFM Performance Assessment. Nepal is the second country after Bhutan in South Asia to undertake PEFA Climate and PEFA Gender Assessments. 

According to the PFM performance assessment, the government has deployed a range of information systems to enhance the efficiency of PFM. The adherence to international standards in the budget and accounts classification ensures comparability, accuracy, comprehensiveness, and transparency in financial information. Budgets are designed with a medium-term outlook, and the predictability of resource availability for spending units is at a high level. The fiscal transfers allocated to subnational governments exhibit transparency and adherence to established rules while the scope and coverage of both the internal and external audits are extensive. 

“Nepal’s successful completion of the PEFA assessment demonstrates its commitment to sound financial management practices,”  World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos said, adding that development partners, including the World Bank, are committed to supporting the next generation of public financial management reforms for Nepal’s green, resilient, and inclusive development. 

The assessment highlights the following areas for potential PFM reforms to achieve better fiscal and budgetary outcomes in the future:

• Restoring fiscal credibility through a sustainable medium-term expenditure framework, recalibration of fiscal rules, expenditure reprioritization, and risk management. 

• Improving public investment efficiency by reducing inefficiencies and building climate-resilient infrastructure. 

• Applying a climate and gender lens to fiscal decision-making to mainstream climate and gender considerations. 

• Enhancing fiscal transparency and accountability by enforcing fiscal rules and promoting accountability.

“As the PEFA assessment demonstrates, some crucial elements center on fiscal discipline and its impact on service delivery. Better fiscal discipline is needed for more effective, inclusive, and accountable delivery of services,” said acting mission director of USAID Nepal Karen Welch. “We, the development partners, bring assistance that supports the government’s efforts across many sectors, like health and education, environmental preservation, and attention to marginalised groups. Sound PFM allows us to work together to better benefit the people of Nepal.”

The programme was chaired by the finance secretary Madhu Kumar Marasini. chief secretary. Dr Baikuntha Aryal, revenue secretary Dr Ram Prasad Ghimire, and financial comptroller general Hari Prasad Mainali expressed their views and reiterated their commitment for PFM reforms as indicated by this assessment. The event also included a panel discussion on the topic: “How can Nepal improve capital expenditure to achieve development outcomes?”.

The event was attended by high-level government officials, accountability institutions, and development partners involved in PFM, including climate and gender agencies. 

Basant Chaudhary's BLC Holdings and Hiranandani Group's Yotta to build a Tier 3 data center in Nepal

Basant K Chaudhary led BLC Holdings and India's Yotta Data Services Pvt Ltd today signed an agreement to build the first-ever super cloud data center in Ramkot.

BLC managing director (MD) Megha Chaudhary and chief executive officer (CEO) of Yotta Sunil Gupta signed the agreement on behalf of their respective companies during the opening session of the Nepal Investment Summit 2024.

Under the agreement, the two will jointly build a data center in Ramkot at the estimated cost of around Rs 3 billion.

This is a crucial forward leap for Nepal in the data center space, according to the information of the BLC Holdings. "It also presents a solid opportunity for the Indian company to tap into the Nepali market."

BLC Holdings is owned by Basant K Chaudhary whereas Yotta Digital Services is a subsidiary of Indian conglomerate Hiranandani Group.

Hiranandani Group -- owned by billionaire brothers Surendra Hiranandani and Niranajan Hiranandani -- is one of the reputed real estate company in India, who has investments in health and service sectors also. 

Both the companies called the collaboration an important milestone.

According to Yotta, it will leverage local resources, regulatory capacity and local relationships, as well as BLC’s customer network, apart from strengthening Nepal’s access to its major platform, which will enable Nepal to access global expertise, international standards, and advanced technologies.

The data center will spread over 11 ropani of land in Ramkot, according to the BLC Holdings. "It produces an IT load of up to 4 megawatts. It will be a modern and advanced infrastructure, equipped with modern safety protocols."

In addition, it will also offer services to both enterprise and hyperscale customers, the company added.

Nepal’s first-ever 'super cloud' tier 3 data center is named 'K One'.

BLC MD Chaudhary, after signing the agreement, said that the K one data center in Ramkot will develop an IT ecosystem in Nepal. "It will be designed by Global Hyper Scalers," she said, adding that it will significantly boost Nepal’s profile in the data center industry and help create employment opportunities in the construction and IT industries.

The agreement includes cooperation for the establishment of world-class data centers, cloud services and artificial intelligence platform services in Nepal, Chaudhary added.

Yotta has two operational data centers, Yotta NM1 in Navi Mumbai and Yotta D1 in Greater Noida, Delhi.

Development Finance Institutions commit increment in investments in Nepal

The Second Development Finance Institutions (DFI) Mission, that started on Tuesday in Nepal, concluded today with a commitment to explore investment opportunities in Class B Banks, Micro-Finance Institutions (MFIs), and Digital Financial Service Providers, following productive deal facilitation sessions held during the three-day mission.

During a meeting with finance minister Barsha Man Pun yesterday, DFI representatives received assurance of the government’s commitment to facilitating foreign investments. In this regard, the finance minister highlighted several amendments made earlier this week to laws aimed at simplifying foreign investments.

“The agendas linked to challenges to ease investments by Development Finance Institutions are gradually being addressed by the government, which is a positive sign to mobilise local saving and attract foreign investments," chairman of the Board of the Swiss Investment Fund for Emerging Markets (SIFEM) Jörg Frieden said, adding that the recognition of DFIs as development and economic growth partners by the government is very encouraging for our investments.

The DFI Mission, organised by Invest for Impact Nepal (IIN), was attended by 14 Development Finance Institutions and Impact Investors from the United States, Europe, and the United Kingdom and Multilateral Agencies such as the IFC.

The mission’s primary focus was on accelerating DFI investments in Nepal's financial service industry beyond Class A Banks. During the mission, DFIs delegates also had meetings with the finance secretary Madhu Kumar Marasini and Nepal Rastra Bank’s governor Maha Prasad Adhikari and the deputy governor Bam Bahadur Mishra, to discuss on the execution of the Memorandum of Understanding (MoU) between the Nepal Government and Development Finance Institutions signed in October 2023 and the issues related to easing entry and exits for DFI investments, respectively.

Representatives of the Nepal Bankers’ Association (NBA) and DFIs also explored opportunities to scale up Nepal’s Financial Service Industry and the role of DFIs to promote sustainable financing.

The First Development Finance Institutions (DFI) Mission in Nepal was held in April 2023.

The Government of Nepal, Finance Ministry and Development Finance Institutions (DFIs) signed a Memorandum of Understanding on October 31, 2023.

The MoU outlines an agreement to enhance the inflow of private capital investment from DFIs into Nepal, the need for transformative investments to achieve UN SDG goals, to foster favourable investment climate, and transfer of technical know-how and knowledge to enhance Nepal’s competitiveness.

Nepal Rastra Bank in its amendment to the Foreign Investment and Foreign Loan Management Bylaws -2080 (February 2024), has recognised DFIs as a category of investors (government/inter-government owned institutions).

The DFI Investments in Nepal from 2008-2023 has amounted to $1.1 billion with the financial sector comprising for 59 per cent of the total.

Remarkably, between 2021 and 2023, the financial sector attracted $629.9 million investments from DFIs.

Attendees of the second DFI Mission included Asian Development Bank (ADB), British International Investment plc (BII), Société Belge d’Investissement pour les Pays en Developpement (BIO), Nederlandse Financierings Maatschappij voor Ontwikkelingslanden nv (FMO), Swiss Investment Fund for Emerging Markets (SIFEM), Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Finnish Fund for Industrial Cooperation (FINNFUND), International Finance Corporation (IFC), US International Development Finance Corporation (DFC), Japan International Cooperation Agency (JICA), MicroVest, DAI Capital, responsibility and Symbiotics, according to a press note issued by the IIN.

Global commodity prices level off, hurting prospects for lower inflation

Global commodity prices are leveling off after a steep descent that played a decisive role in whittling down overall inflation last year, which could make it harder for central banks to cut interest rates quickly, according to the World Bank’s latest Commodity Markets Outlook.

The report also finds that a major outbreak of conflict in the Middle East could halt the inflationary decline that has occurred over the past two years.

Between mid-2022 and mid-2023, global commodity prices plummeted by nearly by 40 per cent. This helped to drive most of the roughly 2-percentage-point reduction in global inflation between 2022 and 2023. Since mid-2023, however, the World Bank’s index of commodity prices has remained essentially unchanged. Assuming no further flare-up in geopolitical tensions, the Bank’s forecasts call for a decline of 3 per cent in global commodity prices in 2024 and 4 per cent in 2025. That pace will do little to subdue inflation that remains above central bank targets in most countries. It will keep commodity prices about 38 per cent higher than they were on average in the five years before the Covid-19 pandemic.

"Global inflation remains undefeated," the World Bank Group’s chief economist and senior vice president Indermit Gill, said, adding, "A key force for disinflation—falling commodity prices—has essentially hit a wall. That means interest rates could remain higher than currently expected this year and next. The world is at a vulnerable moment: a major energy shock could undermine much of the progress in reducing inflation over the past two years.”

Persistently high geopolitical tensions over the past two years have propped up the price of oil and many other critical commodities even as global growth has slowed. The price of Brent crude oil, for example, surged to $91 per barrel earlier this month—nearly $34 per barrel above the 2015-2019 average. The Bank’s forecasts indicate that Brent prices will average $84 per barrel in 2024 before declining to an average of $79 in 2025, assuming no conflict-related supply disruptions. If the conflict in the Middle East were to escalate further, however, oil-supply disruptions could push up global inflation. A moderate conflict-related supply disruption could raise the average Brent price this year to $92 per barrel. A more severe disruption could see oil prices surpass $100 per barrel, raising global inflation in 2024 by nearly one percentage point.

“A striking divergence is emerging between global growth and commodity prices: despite relatively weaker global growth, commodity prices will most likely remain higher in 2024-25 than in the half-decade before the Covid-19 pandemic,” said Ayhan Kose, the World Bank Group’s Deputy Chief Economist and Director of the Prospects Group. “One critical factor behind this divergence relates to heightened geopolitical tensions that are keeping upward pressure on prices of major commodities and stoking risks of sharp price movements. Central banks must remain alert about the inflationary implications of commodity-price spikes amid elevated geopolitical tensions.”

The average price of gold—a popular choice for investors seeking 'safe haven'—is expected to hit a record in 2024 before moderating slightly in 2025. Gold holds a special status among assets, often rising in price during periods of geopolitical and policy uncertainty, including conflicts. Strong demand from several developing-country central banks, along with heightened geopolitical challenges, is expected to bolster gold prices throughout 2024.

An escalation of the conflict in the Middle East could also drive up prices of natural gas, fertilizers, and food, the report notes. The region is a crucial gas supplier—20 per cent of global liquefied natural gas (LNG) trade transits the Strait of Hormuz. If the LNG supply were interrupted, fertilizer prices would also rise substantially, likely driving up food prices. The Bank’s baseline forecast, however, is for overall food prices to decline somewhat—by 6 per cent in 2024 and 4 per cent in 2025. Fertilizer prices are expected to fall by 22 per cent in 2024 and 6 per cent in 2025.

Accelerating investment in green technologies has bolstered prices of key metals that are critical for the global clean-energy transition. Prices of copper—necessary for electricity-grid infrastructure and electric vehicles—surged to a two-year high this month. They are expected to rise by 5 per cent in 2024 before stabilizing in 2025. Prices of aluminum are forecast to rise by 2 per cent in 2024 and 4 per cent in 2025, bolstered in particular by the production of electric vehicles, solar panels, and other renewable-power infrastructure.

The report also contains a special focus section evaluating the performance of five well-known approaches used to forecast the prices of three key commodities—crude oil, copper, and aluminum. It finds that each of them suffers from certain deficiencies, but each also offers important advantages. As a result, the analysis suggests, forecasts are most accurate when they reflect a variety of analytical approaches—and a healthy dose of judgment.

Qatar Emir Al Thani wraps up Nepal visit, Nepal-Qatar sign two agreements, six MoUs

Qatar Emir Sheikh Tamim bin Hamad Al Thani concluded his two-day state visit to Nepal and left Kathmandu today afternoon.

President Ram Chandra Poudel and other high-ranking officials saw off Al Thani at the Tribhuvan International Airport (TIA) this afternoon in Kathmandu.

Earlier Nepal and Qatar signed two agreements and six memorandums of understanding (MoUs) following a delegation-level bilateral meeting at The Soaltee Hotel in Kathmandu. Prime Minister Pushpa Kamal Dahal and Qatar Amir Al Thani led their respective delegations in the meeting.

According to a press note issued by the Foreign Ministry, the two countries have signed different agreements and MoUs for cooperation in the fields of education, arts and culture, sports, news agencies, diplomatic training and attorney general offices.

Likewise, the private sector organisations of the two countries also signed agreement to further enhance economic relations between the two countries.

Emir Al Thani arrived in Kathmandu yesterday afternoon from Dhaka after wrapping up his state visit to Bangladesh. He held talks with President Ram Chandra Poudel at the Office of the President yesterday evening. 

Later, he attended a state reception organised by President Poudel in the honour of the Qatar Emir and the Qatari delegation.

After the bilateral meeting with Prime Minister Pushpa Kamal Dahal today, Qatar Emir Al Thani attended a luncheon hosted by Prime Minister Dahal.

Nepal has also decided to gift a pair of elephants to the State of Qatar.

Agreements and MoUs signed:

i) MoU for Cooperation in the Fields of Culture and Arts

ii) MoU for Cooperation in the Field of Education, Higher Education and Scientific Research

iii) MoU on Cooperation in the Field of Youth and Sports

iv) MoU on Cooperation between the Office of the Attorney General of Nepal and the Public Prosecution of the State of Qatar

v) MoU on Cooperation in the Field of Diplomatic Training and Education between the Institute of Foreign Affairs (IFA), Nepal and the Diplomatic Institute of Qatar

vi) Renewal of the MoU between Qatar Chamber and the Federation of Nepalese Chambers of Commerce & Industry (FNCCI)

vii) Agreement on Cooperation and Exchange of News between Rastriya Samachar Samiti of Nepal and Qatar News Agency (QNA)

vii) Agreement on the establishment of Joint Business Council (JBC) between Qatar Chamber and the Federation of Nepalese Chambers of Commerce & Industry (FNCCI)

Before signing agreements, Prime Minister Dahal held bilateral talks with Emir of Qatar Sheikh Tamim bin Hamad Al-Thani.

Taking stock of the existing relations so cordially subsisting between Nepal and Qatar, both leaders discussed about enhancing bilateral cooperation by furthering the avenues of partnerships.

Following the talks, the Prime Minister and Emir witnessed a signing ceremony of bilateral agreements and MoUs. 

Meanwhile, Prime Minister Pushpa Kamal Dahal 'Prachanda' has said that there should be an exchange of bilateral assistance between Nepal and Qatar in the best interests of both nations by further consolidating the bilateral ties.

During the bilateral talks, Prime Minister apprised the distinguished guest that Nepal offers ample and appropriate opportunities for investment in agriculture, tourism, and infrastructure sectors.

Stating that Nepali migrant workers in Qatar have served as a tool to further strengthen the friendly relations between Nepal and Qatar, he spoke of the need to deepen such ties in the days to come.

The Prime Minister also called on Qatar to facilitate the safe release of Nepali student Bipin Joshi, who has been missing since the conflict between Israel and Hamas.

Affirming that Nepal and Qatar always enjoy a cordial relationship, the Prime Minister said this relationship is founded on cordial friendship, mutual respect, trust, and assistance. "Qatar remains as a reliable friend of Nepal and such relations are getting deeper and extended," he said, adding that these relations are not limited to just an official level but have been expanded to the people-to-people level as well.

Describing Nepal as 'one of the attractive destinations for investment for the globe', Prime Minister Dahal said agriculture, energy, hydropower, infrastructure development, tourism, information and communications technology, service and hospitality sectors are suitable areas for foreign investment in Nepal.

"Nepal is a suitable place for producing organic agricultural products due to its geographical diversity," he said, adding that the Qatari investors would be encouraged to consider investment in this sector since Nepal was a center of attraction in tourism in the world parlance.

Remembering the ascent of the highest mountain in the world Mt Everest by the first Qatari man, Sheikh Mohammed bin Abdulla Al-Thani in 2013, the Prime Minister said that it helped contribute in the promotion of Nepal's tourism in the world.

On the occasion, PM Dahal requested to include Nepal in the list of Qatar's Tourism Authority's external tourism destination.

PM Dahal urged the Qatari government for operation of flights from Lumbini and Pokhara to Qatar as well.

Stating that there were effective and sufficient air transportation between Kathmandu to Doha, PM Dahal urged the Qatari government to consider operating flights from Lumbini and Pokhara to Doha as well.

Earlier, stakeholders had urged the government to take initiatives for operating direct flight between Bhairahawa and Qatar from Gautam Buddha International Airport during the Qatari Emir's visit to Nepal.

Siddhartha Chamber of Commerce and Industry's president Thakur Kumar Shrestha, requested the government to prioritise the proposal of operating direct flight between Bhairahawa and Qatar.

Likewise, PM Dahal observed that around 400,000 Nepalis migrant workers working in Qatar at present were an important bridge further cementing the bilateral ties between Nepal and Qatar.

"Nepal is going to establish vocational training and skill development center for aspiring Nepali migrant workers to Qatar," he said, urging Qatari government for its assistance in setting up such centre.

Nepal-Qatar Joint Business Council formed

A Joint Business Council between Nepal and Qatar has been established, which includes the private sectors of both the nations.

An agreement was reached between the two chambers today (on Wednesday) for the establishment of a council headed by president of Federation of Nepalese Chambers of Commerce and Industry Chandra Prasad Dhakal and president of Qatar Chamber Sheikh Khalifa bin Jassim Al Thani, in Kathmandu.

The agreement was signed by FNCCI president Chandra Prasad Dhakal and Qatar Chamber president Sheikh Khalifa bin Jassim Al Thani in the presence of Emir Sheikh Tamim bin Hamad Al Thani of Qatar and Prime Minister Pushpa Kamal Dahal.

The council will work in the areas of business expansion, investment promotion, technology transfer and tourism promotion, according to a press note issued by the FNCCI.

The Joint Business Council will be a permanent mechanism for dialogue with Qatar, a Gulf country experiencing rapid economic growth, the press note reads adding that the purpose of the Joint Business Council is to increase cooperation and understanding between the private sectors of Nepal and Qatar.

The council will play an effective role in attracting investments from Qatar and also expanding trade with the Gulf nation, which is known as a work destination for Nepalis. There is a high demand for agricultural products, water, herbs, spices and spice products in the Gulf countries. As Qatar is an investment destination due to its rapid economic expansion, the Joint Business Council will play an effective role in attracting investments in Nepal. The council will also work in the field of tourism promotion, it adds.

After the establishment of the council, cooperation between the two chambers is expected to further intensify and presidents of both the chambers are of the opinion that it will help in investment and business expansion.

"This agreement will further increase cooperation in the coming days," president of the Qatar Chamber Sheikh Khalifa bin Jassim Al Thani said, after signing the agreement.

Likewise, FNCCI president Chandra Prasad Dhakal said that there will be more initiatives taken through the council to increase cooperation between Nepal and Qatar. "The council will continue to work to benefit Nepal from Qatar's rapid economic development," he said adding that the establishment of the Joint Business Council will help in attracting more investments in hydropower, tourism infrastructure, agro-processing and information and communication technology sectors.

In addition, the agreement between FNCCI and Qatar Chamber has also been renewed. The new agreement was signed by FNCCI president Dhakal and Qatar Chamber president Al Thani.

The agreement was also signed in the presence of Sheikh Tamim bin Hamad Al Thani, Emir of Qatar and prime minister of Nepal Pushpa Kamal Dahal.

The first agreement between FNCCI and Qatar Chamber was signed in 2005. Since then, the two chambers have been cooperating in various ways for investment and business promotion.

Nepal-Tibet meeting reviews Aid Projects in Nepal

The first meeting of the Aid Projects to Nepal (2024-2028) took place in Lhasa, China’s Tibet Autonomous Region on April 23 and 24.

The first meeting was co-chaired by joint secretary of the Ministry of Federal Affairs and General Administration Kamal Prasad Bhattarai and director general of the Foreign Affairs Office of the China’s Tibet Autonomous Region Baiman Yangzong.

On the occasion, the discussions were focused on the coordination mechanism of aid projects by the Tibet Autonomous Region, China to Nepal in terms of work schedule, selection modality of the projects, and the ways of implementation and monitoring, according to a press note issued by the Nepali consulate in Lhasa.

During the meeting, both sides agreed to hold the meeting of aid projects twice in the first half of the year, so as to focus on the projects arrangements and twice in the second half of the year for the implementation and review of the implemented projects. Furthermore, the two sides underlined the need to enhance the level of support for improving the livelihood of people residing in bordering districts in the Northern Himalayan region of Nepal through the Aid Projects.

On Wednesday, joint secretary at the Ministry of Federal Affairs and General Administration and the head of Nepali Delegation Kamal Prasad Bhattarai paid a courtesy call on executive vice-chairman of the People’s Government of Tibet Autonomous Region of the People’s Republic of China Chen Yongqi. During the meeting, views were exchanged on matters of mutual interests; including the promotion of socio-economic linkages for further strengthening Nepal-China relations.

The second meeting of the Aid Projects to Nepal will take place on a mutually convenient date in May 2024, the press note reads.

The delegation also visited the Consulate General of Nepal in Lhasa, where Consul General Navaraj Dhakal welcomed and hosted Luncheon in honour of the joint secretary and his delegation. 

The Nepali delegation will visit Ali Prefecture and its vicinity on Thursday. The delegation is scheduled to return Kathmandu on Friday.

The delegation of Nepal included officials from the Ministry of Federal Affairs and General administration, Consulate General of Nepal in Lhasa. Likewise, the Chinese delegation comprised the high-ranking officials of the Foreign Affairs of China’s TAR.

The final breakthrough of the Nagdhunga main tunnel

Much anticipated breakthrough of the Nagdhunga Tunnel finally came true today. However, it will take another one year to finally moving the vehicles through the tunnel.

The excavation of the 2,688 m-long main tunnel was successfully completed, according to a press note issued by the Embassy of Japan in Nepal.

Ambassador of Japan to Nepal Kikuta Yutaka, on the occasion, congratulated all the people concerned, both Japanese and Nepalis, in overcoming so many challenges to reach this momentous milestone stating “You are the pride of country.”

The Nagdhunga Tunnel is the very first mountainous traffic road tunnel in Nepal. Worth Rs 22 billion, three-quarters of which is supported by the government of Japan

with highly concessional loans to Nepal, the construction work is contracted to Japanese engineering companies and they are making every effort for the sake of development of Nepal, the press note reads.

When it is finished after remaining interior work such as lining and connecting equipment, the convenience of traffic will be greatly improved, it reads, adding that it will be extremely significant for the promotion of the local economy as well.

The construction of the tunnel commenced in 2019. Digging a tunnel in the Himalayan mountainous region, which is still growing and has intricate strata, is an unimaginably difficult challenge. “The inside of the evacuation and main tunnels were repeatedly hit by unexpected floods and collapses during the extremely difficult excavation work,” it adds. “Outside the tunnels, heavy rain caused landslides on the slope faces and the Covid-19 pandemic delayed the progress.”

The Japanese teams has been working together with Nepali teams to take on technical challenges in the site, based on their experience in the construction of Sindhuli road, known as BP highway, which was also supported by the Government of Japan.

The project provides a unique opportunity to transfer advanced Japanese skills to young Nepali engineers, the press it would surely benefit the Nepali people in the future. “The Embassy of Japan believes that this project will be instrumental for Nepal in achieving sustainable economic development and further deepening of cordial relationship between Japan and Nepal.”

Nepal-Switzerland Bilateral Consultations Mechanism discuss development partnership

The fourth meeting of the Nepal-Switzerland Bilateral Consultations Mechanism (BCM) held at the Federal Department of Foreign Affairs (FDFA) in Bern, Switzerland today discuss a gamut of issues including development partnership.

Head of the Europe-Americas Division of Ministry of Foreign Affairs of Nepal, Joint Secretary Ganesh Prasad Dhakal and Assistant State Secretary for Asia and the Pacific in the FDFA of Switzerland Heinrich Schellenberg led the delegations of their respective countries, according to a press note issued by the Embassy of Nepal in Geneva.

Nepali delegation included ambassador of Nepal to Switzerland Ram Prasad Subedi and the Embassy Officials whereas the Swiss Delegation included officials from the FDFA and the Swiss Agency for Development and Cooperation (SDC).

During the meeting, the two sides reviewed entire spectrum of Nepal-Switzerland relations including economic ties, development partnership, multilateral cooperation, and contemporary global issues such as climate change and human rights.

The two sides also discussed the exchange of high-level visits, Nepal’s graduation from LDC category, progress made towards meeting the Sustainable Development Goals (SDGs), and ways to further enhance bilateral cooperation on trade, investment, tourism, science and technology, and vocational training, among others, according to the press note.

On the occasion Joint Secretary Dhakal requested the Swiss side to encourage the participation of their investors in the upcoming Nepal Investment Summit being held in Kathmandu this month.

The Nepali side thanked the Swiss Government for consistently placing Nepal as a priority country for Swiss Development Cooperation. While expressing satisfaction over Nepal’s progress, the Swiss side assured of their continued support to Nepal’s development endeavours.

Following the meeting, the head of the Swiss delegation hosted a luncheon in honour of the visiting Nepali delegation.

Nepal-Switzerland Bilateral Consultations Mechanism was established in 2015 and the next meeting will be held in Kathmandu on mutually convenient dates.

Though, World Bank claims growth rebound, it downgrades Nepal’s GDP growth to 3.3 per cent

Nepal’s economy is expected to grow by 3.3 per cent in the current fiscal year (FY2024), driven by revived tourism and a pickup in hydropower exports, according to the World Bank.

On the demand side, private consumption will drive growth, supported by a substantial increase in remittance inflows, according to the World Bank’s twice-a-year country development update,

However, the World Bank on October 3, 2023 -- six months ago -- has projected Nepal's economy to grow by 3.9 per cent. In six months, the development partner has downgraded Nepal's economic growth to 3.3 per cent from 3.9 per cent.

However, the latest 'Nepal Development Update, Nepal’s Economy on a Recovery Path, but Private Investment Remains Low', projects a further rebound in growth of 4.6 per cent in the next fiscal year 2025. 

The forecast is subject to multiple risks, including a growth slowdown in partner countries, notably India, Gulf countries, and Malaysia which could lead to a drop in remittances and tourism, the report reads, adding that further business environment reforms aimed at attracting more private investment will be needed to support medium-term growth.

“Strengthening the implementation of capital expenditure, boosting business confidence, and strengthening Nepal's international competitiveness are key to stimulating economic growth and reducing poverty,” said World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos.

The Nepal Development Update is prepared in parallel with the South Asia Development Update, a twice-a-year World Bank report that examines economic developments and prospects in the South Asia region and analyses policy challenges countries face.

The April 2024 edition titled 'Jobs for Resilience' shows growth in South Asia is again higher than any other emerging markets and developing country region in the world, projected at 6 per cent in 2024 and 6.1 per cent in the next year 2025.

But this strong outlook is deceptive, says the report. For most countries, growth is still below pre-pandemic levels and is reliant on public spending. At the same time, private investment growth has slowed sharply in all South Asian countries, and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population.

“South Asia is failing right now to fully capitalize on its demographic dividend," World Bank chief economist for South Asia Franziska Ohnsorge said, adding that it is a missed opportunity. "If the region employed as large a share of the working-age population as other emerging markets and developing economies, its output could be 16 per cent higher."

The South Asia Development Update recommends a range of policies to spur firm growth and boost employment, including increasing trade openness, improving business climates and institutions, removing financial sector restrictions, improving education, and strengthening legal protection of women’s rights. And these measures would also help lift employment growth and boost productivity, and free up space for public investments in climate adaptation.