Nepal’s RSP majority eases near-term political risk, policy agenda key: Fitch Ratings

The clear parliamentary majority for Nepal’s Rastriya Swatantra Party (RSP) reduces near-term political uncertainty and provides an opportunity for enhanced policy predictability and implementation of governance and economic reforms, according to a press note issued by the Fitch Ratings. "The election result should lower the risk of a prolonged coalition negotiation after severe unrest last year, reduce the chance of a recurrence of recent years’ frequent government changes and potentially boost investor sentiment over time if signals point to tangible improvements in governance and economic reform delivery," it adds.
The scale of the RSP’s victory reflects a voter mandate to break with the status quo politics of power sharing, with the Nepali Congress (NC) and the Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML) losing seats. A single-party majority, subject to final certification by the Election Commission (EC), should imply a short political transition and could improve Nepal’s ability to sustain reform momentum and translate hydropower-led investment into broader-based growth.
The RSP targets average real GDP growth of about 7 percent over the next five years, raising per capita income above $3,000, which we believe is ambitious. The new government’s policy agenda will be key in determining the extent to which growth can be lifted from our current forecast of 4.5 percent in the fiscal year ending 15 July 2027.
The RSP’s manifesto and announcements indicate it is aiming for policies that would lead to productivity gains, formal job creation to curb emigration, and higher private-sector-led investment in infrastructure, agriculture, service, digital and innovative industries.
When Fitch affirmed Nepal’s ‘BB-’ rating with a Stable Outlook in November 2025, "we stated that strong, sustainable growth, enabling substantial increases in GDP per capita - potentially supported by improved governance standards and regulations conducive to private and foreign investment - could improve Nepal’s credit profile," it further reads.
However, implementation capacity could be a key risk down the road, it says, adding that Nepal’s weak government effectiveness and regulatory quality scores compared with its peers could constrain execution, for instance, if reform sequencing is unclear or governance outcomes lag behind campaign expectations. "Private investment and foreign participation are likely to hinge on measurable improvements in the business environment and accountability frameworks, alongside sustained anti-corruption enforcement under the new government."
Nepal’s ‘BB-’ rating is supported by low and highly concessional government and external debt burdens, strong external liquidity, and solid medium-term growth prospects anchored by hydropower, with resilience reinforced by successful IMF programme implementation. Constraints remain the underdeveloped economy’s exposure to external shocks and natural disasters, and weaker structural features - especially GDP per capita and governance metrics - than ‘BB’ category peers.

IMF sets stage for major anti-corruption reform plan in Nepal

An International Monetary Fund (IMF) technical assistance mission, led by Jonathan Pampolina, successfully concluded its scoping visit to Kathmandu yesterday (January 21).
The 10-day mission, which began on January 12, was conducted at the request of the Nepali authorities to lay the groundwork for a comprehensive Governance and Corruption Diagnostic (GCD).
The diagnostic is designed to identify governance weaknesses and corruption vulnerabilities that are critical to Nepal’s macroeconomic stability. The final goal is to create a prioritized and sequenced action plan to strengthen the country's state functions and integrity.
What are the focus areas of the diagnostic?
The mission utilized the IMF 2018 Enhanced Governance Framework to target core state functions, specifically focusing on Fiscal Governance, Financial Sector Oversight, Rule of Law, strengthening anti-money laundering and countering the financing of terrorism and Anti-Corruption Framework.
The IMF team held extensive consultations with a broad spectrum of state institutions, including the Ministry of Finance, Nepal Rastra Bank (NRB), the Supreme Court, and the Commission for the Investigation of Abuse of Authority (CIAA). To ensure a holistic perspective, the mission also met with business associations, civil society organizations, and international development partners.
The IMF staff praised the Nepali government's commitment to the diagnostic process. A full GCD mission is scheduled for the coming months to finalize reform recommendations. The process will culminate in a comprehensive report analyzing the severity of corruption and providing a roadmap for reforms intended to boost Nepal’s economic outcomes and institutional resilience.

Ethical wealth creation key to growth and bridging inequality: Dr Subramanian Krishnamurthy

Ethical wealth creation is key to growth and bridging inequality, according to International Monetary Fund (IMF) executive director and former chief economic advisor of the Government of India, Dr Subramanian Krishnamurthy Venkata.

Speaking at the first Prabhakar SJB Rana Memorial Lecture as the keynote speaker in Kathmandu today, he also stressed religious capitalism. “Wealth generation is not a necessary evil but a boon – and this is an ideology that has been adopted from the ideologies of the East – built from dharmic capitalism and the civilizational ethos that enabled our ancestors to pursue and receive enormous success,” he added.

“Socialism and communism are the ideologies that originated in the West – not in the East," he said, adding that the entire ideology was bankrolled by a capitalist. “The dharmas – four purusharthas that include Dharma, Artha, Kaama and Mokshya are parts of our ethos,” Dr Subramanian said, reminding the Sri Suktam. “Wealth is not a necessary evil, but a boon to be received. So, we have to disband the imported ideologies.”

He also reminded ethical wealth creation for a prosperous nation, in the program organized by the Nepal-India Chamber of Commerce and Industry (NICCI) to honor the late Rana’s contribution to the economy. “Inclusive growth is critical and India has been able to have an inclusive growth. India’s poverty has decreased and consumption inequality has declined significantly, according to the latest survey.”

The speakers, on the occasion, remembered late Prabhakar SJB Rana as a towering figure, very close to the political powers, who had maintained good relations with political parties but never took advantage for his benefit.

Remembering his father, Siddhartha SJB Rana, chairman of Tara Management, said that Nepal was ahead of India in the 90s in opening up the economy, but Nepal somewhat stalled. “A disheartening thing is that Nepal has prioritized changing the political systems without addressing economic needs,” he said suggesting that the Bhairahawa and Pokhara Airports could have been fully operational, had the government well planned.

The NICCI has organized 'the Prabhakar SJB Rana Memorial Lecture: Celebrating Leadership, Vision, and Legacy' to celebrate his legacy and contribution to the economy and nation.

Late Rana, the founder President of NICCI, played a pivotal role in Nepal's development by founding not only NICCI, but also a range of vital business and social organizations such as the Hotel Association of Nepal (HAN), Independent Power Producers’ Association, Nepal (IPPAN), PATA Nepal Chapter, and Nepal Heritage Society.

Likewise, Prasanna Srivastava, Deputy Chief of Mission, Embassy of India to Nepal in Kathmandu, noted some of the major achievements of the Indian government in Nepal. He highlighted the recent commerce secretary-level talks that followed the trade and transit meet in January this year. He also highlighted Nepal-India engagement in facilitating bilateral trade and energy, the tripartite power agreement between Nepal, India, and Bangladesh, and the net revenue Nepal earned by exporting energy, apart from digital connectivity.

“The NICCI is honored to remember Mr Rana as a visionary leader, entrepreneur, and trailblazer in Nepal’s overall business, hospitality sector, industry and hydropower,” NICCI President Sunil KC said, on the occasion, “The NICCI will organize Prabhakar SJB Rana Memorial Lecture every two years.”

NICCI Immediate Past President (IPP) Mrs Shreejana Rana, on the occasion, remembered late Prabhakar SJB Rana as a trailblazer in Nepal’s private sector.

NICCI, on the occasion, also launched “Business Climate Survey for Indian Companies in Nepal, 2024." The survey, led by Kuber Chalise, and supported by Sweta Karki and Sajina Rai, have given recommendations for the government to help facilitate the Indian joint ventures (JV) so that they can create more jobs in the country and pay more tax to the government coffer.

NICCI vice president and Surya Nepal managing director Ravi Kumar Rayavaram, on the occasion thanked all the participants.

The NICCI, a not-for-profit organization, was founded in 1993 by late Prabhakar SJB Rana. It has played a key role in promoting bilateral economic relations focusing on key sectors such as trade, transit, logistics, tourism, energy, infrastructure, and FDI since its establishment.

Nepal to receive Rs 5.59 billion from IMF under ECF

Nepal is poised to receive approximately Rs 5.59 billion (around $40.6 million) from the International Monetary Fund (IMF), following a staff-level agreement reached on the fifth review of the country's economic reform programme under the Extended Credit Facility (ECF).

The IMF team, led by Sarwat Jahan, concluded its mission in Kathmandu on January 19 after holding discussions with Nepali authorities. In a statement released on Monday (today), the IMF confirmed that the agreement is subject to approval by the IMF Executive Board. Upon formal endorsement, the disbursement will bring Nepal’s total financial support under the ECF to about $283.9 million (SDR 219.7 million), out of the approved SDR 282.42 million.

“Nepal continues to make progress with the implementation of the ECF-supported programme,” said the IMF statement, noting that all quantitative performance criteria and indicative targets for end-July 2024 were met, with the exception of those related to revenue collection and child welfare grants.

Key reforms under this review include amendments to the anti-money laundering (AML) legislation, enhanced financial oversight of public enterprises, and the completion of an external audit of Nepal Rastra Bank’s fiscal year 2023-24 financial statements using international central bank auditing standards.

Despite the cancellation of an initial procurement process, the central bank has renewed efforts to complete a Loan Portfolio Review (LPR) of the country’s 10 largest banks by hiring an independent international consultant. The IMF emphasised that timely execution of the LPR, based on Basel Committee guidelines, is critical for safeguarding financial stability.

Nepal's economic recovery, which began in fiscal year 2023-24, was disrupted by severe floods in September 2024. The disaster caused extensive damage to infrastructure and agriculture, contributing to a surge in food prices and pushing inflation to 6.1 per cent by December.

While the country’s external position has improved thanks to strong remittance inflows and subdued imports, the IMF warned of growing vulnerabilities in the financial sector. Non-performing loans in the banking sector climbed to 4.4 percent in October 2024, and the financial condition of savings and credit cooperatives (SACCOs) has deteriorated further.

Looking ahead, the IMF projects Nepal’s economy to grow by over 4 per cent in the fiscal year 2024-25, supported by increased public capital expenditure and post-flood reconstruction. Imports are also expected to rebound in the second half of the fiscal year, while food inflation is likely to ease as transportation links are restored and agricultural production recovers.

However, the outlook remains fragile. “The growth trajectory faces risks from delays in capital spending, rising financial sector stress, and potential setbacks to policy continuity and reform momentum,” the IMF cautioned.

During the visit, the IMF delegation held consultations with deputy prime minister and finance minister Bishnu Prasad Paudel, National Planning Commission (NPC) vice-chair Dr Shiva Raj Adhikari, Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari, and other senior officials. The team also engaged with private sector representatives and development partners.

अर्थमन्त्रालयमा विष्णु पौडेलको पाँचौ इनिङ : अर्थतन्त्रको ‘स्लो पिच’मा हान्लान् त छक्का ?

सुन्दा अचम्म लाग्न सक्छ । तर, नेपालमा यो सामान्य हो । नेपाली काँग्रेसका सभापति शेरबहादुर देउवा पाँच पटक प्रधानमन्त्री भईसकेका छन् भने सोमबार केपी शर्मा ओलीले चौथो पटक प्रधानमन्त्रीको सपथ ग्रहण गरे ।

ओलीले चौथो पटक प्रधानमन्त्रीको सपथ ग्रहण गर्दा उनका सारथी विष्णु पौडेलले पाँचौ पटक अर्थमन्त्रीको सपथ ग्रहण गरेका छन् ।

ओली मन्त्रीपरिषदमा उपप्रधानमन्त्रीसहितको कार्यभार सम्हालेका पौडेलको सिंहदरबार यात्रा २०५३ सालमै सुरु भएको हो । २०५३ सालमा प्रधानमन्त्री लोकेन्द्रबहादुर चन्दको मन्त्रीपरिषदमा युवा, खेलकुद तथा संस्कृति मन्त्री बनेर मैदानमा उत्रिँदा पौडेल युवा नै थिए ।

त्यसैले २०८१ साल असार ३१ गते करिब तीन दशकपछि आठौं पटकको सिंहदरबार यात्रालाई अविस्मरणीय बनाउन उनी कति प्रतिबद्ध छन्, त्यो त आगामी दिनले देखाउला नै ।

किनकि यसअघि २०७९ पुसमा चौथो पटक अर्थमन्त्री बनेका पौडेलेको कार्यकाल छोटो रह्यो । तर, यसपटक उनी उपप्रधान तथा अर्थमन्त्री बन्दा पनि अनौठो संयोग बनेको छ ।

अघिल्लो दिन आइतबारसम्म पनि अध्यक्षले चाहे सघाउन सरकारमा जान तयार रहेको तर आफ्नो मन्त्री बन्ने धेरै इच्छा नभएको बताएका पौडेलले यसपटक अर्थमन्त्री पाउने/नपाउनेमा ढुक्क थिएनन् ।

यसपटक नेकपा एमालेले मन्त्री छान्ने सबै जिम्मा अध्यक्ष केपी शर्मा ओलीलाई दिएको थियो । अध्यक्ष ओलीले आफ्नो सरकार सफल बनाउन अर्थमन्त्रीमा कस्ता सारथी छान्लान् भन्ने धेरैको आ-आफ्नै अनुमान थिए । किनकि, पछिल्ला वर्षहरुमा अर्थमन्त्रीका धेरैजसो निर्णय नीतिगत भ्रष्टाचारमा लिप्त हुन थालेपछि अर्थ मन्त्रालय विवादमा आउने गरेको छ । र समग्र सरकार नै परिवर्तन भएको चर्चा राजनीतिक वृत्तमा व्यापक छ ।

त्यसमाथि अर्थतन्त्रको सुधारमा दह्रो मुटु राखेर अगाडि बढ्नु पर्ने अप्ठयारो परिस्थितीमा अर्थमन्त्री विभिन्न ब्यापारिक घराना तथा स्वार्थ समूहको खेलौना भएका कारण पनि पछिल्ला वर्षहरुमा अर्थमन्त्री बदनाम भएका छन् भने अर्थ मन्त्रालय आफ्नो निर्दिष्ट तथा लक्षित कार्यक्रम एवं बजेट कार्यान्वयनमा असफल हुँदै गएको छ । जसकारण समग्र निजी क्षेत्रको मनोबल घट्दै गएको छ, नेपालमा ब्यावसायिक वातावरण बिग्रँदै गएको छ ।

स्वाभाविक हो, अर्थतन्त्रमा ८१.५५ प्रतिशत योगदान दिने निजी क्षेत्रको मनोबल घटेपछि अर्थतन्त्र चलायमान हुन सकेको छैन । मनोबल बढ्न नसकेपछि निजी क्षेत्र लगानी गर्न हच्किएको छ । त्यसैले मुलुकमा नयाँ रोजगारी सिर्जना हुन सकेको छैन भने सरकारको आम्दानी राजश्व पनि बढ्न सकेको छैन ।

चालु अर्थिक वर्षका लागि सरकारले १४ खर्ब २२ अर्ब रुपैयाँ राजश्व उठाउने लक्ष्य राखेकोमा आर्थिक वर्षको अन्तिम दिन असार ३१ गते सोमबार (आजसम्म) १० खर्ब ३० अर्ब रुपैयाँमात्र उठाउन सफल भएको छ ।

चालु आर्थिक वर्षको राजश्व उठ्तीको प्रवृत्ती हेर्दा राती १२ बजेसम्ममा लक्ष्यको ७५ प्रतिशत राजश्व उठ्ने देखिन्छ । एकातिर विकास निर्माणका लागि सरकारलाई स्रोतको अभाव बढ्दै गएको छ भने अर्कोतिर राजश्व परिचालनमा अर्थ मन्त्रालय आसफल बन्दै गइरहेको परिप्रेक्ष्यमा अर्थमन्त्रीका रुपमा पौडेलको पाँचौ कार्यकाल चुनौतीले भरिपूर्ण रहेको छ ।

सरकारले राजश्व आम्दानी गर्न नसकेको मात्र होइन बजेट खर्च गर्न पनि सकेको छैन । खर्च भएका बजेट उत्पादक तथा अर्थतन्त्र चलायमान बनाउनेभन्दा पनि अनुत्पादक तथा अनौपचारिक अर्थतन्त्रलाई बढावा दिने प्रकृतीका छन् ।

त्यसैले अर्थमन्त्री पौडेलले निश्चित ब्यापारिक घराना हेरेर होइन, समग्र निजी क्षेत्रलाई नै प्रतिस्पर्धी बनाउने नीति ल्याउन सके मात्र मुलुकमा आर्थिक गतिविधि चलायमान हुन्छ ।

चालु आर्थिक वर्षमा बाह्य क्षेत्रमा सुधार भएको भए पनि अर्थतन्त्रको आन्तरिक क्षेत्र सुस्त नै छ । हुन त बाह्य क्षेत्र सुधारमा पनि सरकारको कुनै पनि प्रत्यक्ष्य योगदान छैन ।

किनकि, मुलुकमा रोजगारी नभएर विदेशीएका युवाले पठाएको रेमिट्यान्सको भरमा बाह्य क्षेत्रमा सुधार भएको हो । हालको रेमिट्यान्स आयको प्रवृत्ति हेर्दा विदेशिएका युवाले चालु आर्थिक वर्षमा १५ खर्ब रुपैयाँ रेमिट्यान्स पठाउने देखिन्छ ।

त्यसैले सरकारको ब्यवसायमैत्री नीतिले उत्पादन बढेर निर्यात प्रबर्धन भएर वा पर्यटन पूर्वाधारको विकासले पर्यटकको आगमन उल्लेख्यरुपमा बढेर बाह्य क्षेत्रमा सुधार भएको भए यसको दीगोपनाको वा सरकारको योगदानको चर्चा गर्न सकिन्थ्यो । तर, स्थिति त्यस्तो छैन ।

जनसंख्याको ठूलो हिस्सा विदेशिएका कारण पनि बजारमा माग सिर्जना हुन सकेको छैन । माग सिर्जना नहुँदा उत्पादनमा पनि संकुचन आएको छ । उद्योगहरु पूर्णक्षमतामा संचालन हुन सकेका छैनन् । जसको कारण अर्थतन्त्र एउटा गोलचक्करमा फसेको छ ।

तसर्थ पनि अर्थमन्त्रीमा पाँचौ इनिङ पौडेलको लागि फलामको च्यूरा सावित हुने अनुमान गर्न सकिन्छ ।

बाह्य क्षेत्रको सुधारको दीगोपनामा शंका भए पनि बाह्य क्षेत्र सुधारीएको फाइदा लिएर आन्तरिक क्षेत्र सुधारमा प्रयत्न गर्न सकिन्थ्यो । तर, नेपालको दुर्भाग्य, अर्थतन्त्र सुधार गर्ने दह्रो मुटु भएको अर्थमन्त्री पाउनै सकेन देशले ।

अर्थमन्त्रीहरु ब्यापारिक घरानाका मुन्शी वा स्वार्थ समूहको नीतिगत भ्रष्टाचारका साक्षीमात्र भएका कारण सिंहदरबारमा फोटो झुण्ड्याउने बाहेक खासै केहि उल्लेखनीय काम गर्न सकेनन् । कसै कसैले केहि गर्न खोजे पनि प्रधानमन्त्री हावी भए ।

त्यसैले, २०६४ सालदेखि पछिका सबैजसो सरकारको नीति अर्थतन्त्र सुधार गर्नेभन्दा पनि राज्यका स्रोत साधन दोहन गर्नमा केन्द्रीकृत भएका कारण अर्थतन्त्र चलायमान हुन सकेन । अझ २०७४ साल पछि त खुलेआम नीतिगत भ्रष्टाचार संस्थागत हुन थाल्यो ।

उदाहरणको लागि हेरौं न, एउटा नियामक निकाय धितोपत्र बोर्डको अध्यक्ष चयनमा वर्तमान तथा पूर्वप्रधानमन्त्री र अर्थमन्त्रीको अनावश्यक र रहस्यमय रुची, राजनीतिक खेलकुद तथा हस्तक्षेप ।

त्यसैले, अर्थमन्त्रीका रुपमा पौडेलले मुलुकमा उद्यम गरेर खाने वातावरण बनाउँदा कुनै पनि ब्यावसायिक घरानाको स्वार्थमा धक्का पुग्दैन । बरु झन् ब्यवासायिक घरानाको पनि बजार बढ्छ भनेर बुझाउन सके भने उनको कार्यकाल आधा सफल हुन्छ ।

त्यसपछि, बढ्दो चालु खर्च र चालु खर्चको प्रोडक्टिभिटी र इफिसियन्सीमाथि निर्मम समीक्षा जरुरी छ ।

आर्थिक वर्ष २०८१/८२ देखि सरकारले विगतमा लिएको आन्तरिक तथा बाह्य ऋणको साँवाब्याज तिर्नमात्रै ५ खर्ब रुपैयाँभन्दा बढी खर्च हुने देखिन्छ । २०७४ मा ओली प्रधानमन्त्री भएपछि अन्धाधुन्धा ऋण लिने र अनुत्पादक क्षेत्रमा खर्च गर्ने कुप्रथा सुरु भएको थियो ।

ओलीको ४३ महिने कार्यकालमा पाैडेल पनि छोटो समय अर्थमन्त्री बनेका थिए । र, त्यो ४३ महिनामा २५० प्रतिशतले ऋण बढेको थियो । सार्वजनिक ऋण व्यवस्थापन कार्यालयको तथ्यांकअनुसार आर्थिक वर्ष २०७३/७४ मा ६ खर्ब ९७ अर्ब ६९ करोड रुपैयाँ बराबर रहेको राष्ट्रिय ऋण १६ खर्ब पुगेको थियो । अहिले राष्ट्रिय ऋण २४ खर्ब रुपैयाँ नाघिसकेको छ ।

विगतमा पार्टी महासचिव र अर्थमन्त्रीकारुपमा अन्धाधुन्ध राष्ट्रिय ऋण लिनका लागि रोक्न पाैडेलले खासै भूमिका खेलेको देखिँदैन ।

अर्कोतिर २०५१ सालमा तत्कालीन मनमोहन अधिकारीको सरकारले वृद्धभत्ता बाँडेर वाहवाही कमाएको थियो । नेकपा एमालेले यसैलाई बेचेर अहिलेसम्म पनि राजनीतिक लाभ लिइरहेको छ । त्यसपछिका अन्य सरकारले पनि वृद्ध तथा सामाजिक सुरक्षा भत्ता बढाउन प्रतिस्पर्धा गर्दा अहिले राष्ट्रको ढुकुटीबाट वार्षिक ३ खर्ब रुपैयाभन्दा बढी खर्च हुँदै आएको छ ।

राष्ट्रिय आम्दानी बढाउन ध्यान नदिने र आफ्नै खल्तीको जसरी राष्ट्रको ढुकुटीको पैसा बाँड्ने विकृति अब देशले धान्नसक्ने अवस्था छैन । आफ्नै पार्टी एमालेले ल्याएको सामाजिक सुरक्षा भत्ताकाे दायित्व प्रधानमन्त्री ओली र अर्थमन्त्री पौडेललाई फलामको च्यूरा बन्ने खतरा छ ।

के विष्णु पौडेलले चलायमान बनाउलान् त अर्थतन्त्र ?

त्यसैले, नेपालमा यतिखेर प्रधानमन्त्रीको हस्तक्षेपबिना काम गर्न सक्ने, निजी क्षेत्रमैत्री तथा जोखिम लिन सक्ने अर्थमन्त्री चाहिएको छ । पौडेलले आफ्नो पाँचौ कार्यकाल सुरु गर्दै गर्दा यी चुनौती कसरी सामना गर्दछन्, त्यसैबाट उनको यो कार्यकालको समीक्षा हुनेछ ।

किनकि, पौडेललाई सुस्ताएको अर्थतन्त्रलाई चलायमान बनाउने चुनौती एकातिर छ भने नीतिगत भ्रष्टाचारसँग लड्दै जोखिम लिएरै भएपनि अर्थतन्त्रका संरचनागत सुधार गर्ने अर्को चुनौती छ ।

निर्माण व्यवसायीका भुक्तानीका समस्या, लघुवित्त र सहकारीका समस्याजस्ता अर्थतन्त्र र बजारलाई सिधै तल्लो तहमा समेत संकट पारेका क्षेत्रको उद्दार गर्न उनी कति केन्द्रित हुन सक्छन् र प्रधानमन्त्रीको कत्तिको साथ पाउँछन्, त्यसले उनलाई सफल वा असफल बनाउने स्पष्ट छ ।

सपथग्रहण गरेर पौडेल अर्थमन्त्रालय पस्दा चालु आर्थिक वर्षको अन्तिम दिन परेको छ । नयाँ आर्थिक वर्षसँगै बजेट कार्यान्वयन गर्ने अर्को चुनौती पौडेलमा छ । अघिल्ला अर्थमन्त्री वर्षमान पुनले केहि स्वार्थी समूहको लागि परिवर्तन गरेका आर्थिक ऐनलाई पौडेलले कसरी समायोजन गर्दछन्, त्यसले पनि उनको कार्यकालको समीक्षा हुनेछ ।

बजेट आइसेकेको भए पनि आगामी आर्थिक वर्षको मौद्रिक नीति ल्याउने तयारीमा नेपाल राष्ट्र बैंक छ । मौद्रिक नीतिले वित्त नीतिलाई सघाउने हो । किनकि, मौद्रिक नीतिका निश्चित सीमा हुन्छन् । बाह्य क्षेत्र बलियो भयो भनेर माैद्रिक नीतिमार्फत सस्तो ब्याजमा बजारमा वालछ्याल पैसा पठाउँदा देशको अर्थतन्त्रमा कस्तो संकट आउँछ भनेर हेर्न अन्त कतै जानु पर्दैन ओली प्रधानमन्त्री भएको बेला गभर्नर महाप्रसाद अधिकारीले ल्याएको पहिलो मौद्रिक नीति हेरे पुग्छ ।

अहिले विगतमा जस्तो मौद्रिक नीति चलाउन सक्ने अवस्थामा अर्थमन्त्री छैनन् । किनभने, अन्तर्राष्ट्रिय मुद्रा कोषसँग ५० करोड अमेरिकी डलर सहायता लिन अर्थमन्त्री र गभर्नरले कडा शर्तमा सहमति जनाएका छन् । यतिसम्म कि कुनै पनि नयाँ नीति, नियम बनाउँदा आइएमएफसँग सल्लाह गर्ने शर्तमा हस्ताक्षर गरेका छन् ।

आइएमएफले नेपालको वित्तीय क्षेत्रको सुधारमा दबाब बढाउँदै लगेको छ । र, वित्तीय क्षेत्रको सुधारले मात्रै नपुगेको भन्दै वित्त क्षेत्रको सुधार गर्नुपर्ने पनि आइएमएफले सुझाव दिँदै आएको छ ।

पछिल्ला केहि वर्षदेखि बजेटभन्दा पनि मौद्रिक नीतिमा निजी क्षेत्रको चासो बढेको छ । वास्तवमा बजेट अर्थात् अर्थ मन्त्रालयको असफलताले निजी क्षेत्रको चासो मौद्रिक नीति अर्थात् राष्ट्र बैंकतर्फ बढेको हो । अर्थमन्त्रालयप्रति विश्वास जगाउन पौडेलसँग के योजना छ, यसले पनि उनको कार्यकालको समीक्षा हुनेछ ।

नेपालको अर्थतन्त्र आर्थिक कृयाकलापमा नभइकन जग्गा कारोबारी र बिचाैलियाको जालोमा फसेका कारण पनि अर्थमन्त्रीलाई अर्थविदभन्दा बिचौलियाले चलाएको धेरै अर्थविद्हरुको धारणा छ । त्यसैले संरचनागत परिवर्तन नभएसम्म अर्थतन्त्रले गति लिने विश्वास गर्न सकिन्न । यसका लागि आर्थिक सुधारको खाँचो छ । तर, राजनीतिक दलका कार्यकर्ता र बिचौलियाले घेरिएको अर्थमन्त्रालयले आर्थिक सुधार गर्न सक्दैन भन्ने आम सर्वसाधारणको बुझाइ छ ।

त्यसैले पनि पौडेललाई काम गर्न सहज छैन ।

र, यसकारण पनि पौडेलले अर्थतन्त्रको ‘स्लो पिच’मा खेल्न गाह्रो छ कि यो गठबन्धन सरकार हो । हुनत आर्थिक सुधारमा सत्ता सहयात्री नेपाली काँग्रेसको कुनै रोकावट नहुनु पर्ने हो । किनभने आर्थिक सुधार नेपाली काँग्रेसको पनि एजेन्डा हो । तर, नेपाली काँग्रेसभित्र पनि बिचाैलियाको ठूलै समूह छ जो अर्थतन्त्रको बारेमा पटक्कै चिन्तित छैन ।

तत्कालका लागि सुस्त भएको अर्थतन्त्रलाई चलायमान बनाउन सेयर बजार, जग्गा कारोबार र हायर पर्चेजले काम गर्ला । तर, दीर्घकालमा उत्पादन र उत्पादकत्व नबढाए सेयर बजार, जग्गा कारोबार र हायर पर्चेजले मात्र अर्थतन्त्रलाई धानेर राख्न सक्दैन । त्यसैले पनि सत्ता सहयात्री नेपाली काँग्रेसको पूर्णसहयोगमा आर्थिक सुधारका योजना बनाउनु पौडेलको पहिलो प्राथमिकता हुनुपर्छ ।

नेकपा एमालेका उपाध्यक्ष तथा एमाले र माओवादी केन्द्रबीच एकता भई नेकपा गठन हुँदा महासचिव भइसकेका पौडेलले ३० को दशकमा तत्कालीन मालेबाट राजनीतिक यात्रा सुरु गरेका थिए । उनी २०४७ मा एमालेको केन्द्रीय सदस्य बनेका थिए ।

त्यसैले राजनीतिमा पौडेल पुराना र अनुभवी खेलाडी हुन् । तर, निरन्तर बदलिँदो आर्थिक संरचना र सुस्त अर्थतन्त्रलाई चलायमान बनाउन यसपटक पौडेलले धेरै मिहेनत गर्नु पर्ने देखिन्छ ।

प्रतिनिधि सभा निर्वाचनमा रुपन्देही- २ बाट निर्वाचित पौडेलले अर्थतन्त्र सुस्त भएको बेलामा अर्थमन्त्रीको रुपमा आफ्नो करियरको पाँचौ इनिङ सुरु गर्दा राजनीतिक सुझबुझका साथै निर्मम भएर अर्थतन्त्र सुधारका काम गर्दा मात्र केपी ओलीको सरकारमात्र नभएर देश नै सफल हुन्छ ।

अन्यथा, नेपालको बजेटरी इतिहासमा पहिलो अर्थमन्त्री सुवर्ण शमशेरदेखि आजसम्म भएका अर्थमन्त्रीहरु कतिजनाको नाम नेपालीलाई याद छ र ?

अर्थनीतिको बेमेल

नेपाली काँग्रेस तथा नेकपा एमाले सम्मिलित सरकार बनेसँगै अब बजारमात्र होइन आर्थिक नीतिमा पनि समन्वयन गर्नु पर्ने हुन्छ। हुनत संविधानमा समाजवादउन्मूख अर्थतन्त्र लेखिएको छ । तर, राष्ट्रियता, प्रजातन्त्र र समाजवादको सैद्दान्तिक जगमा उभिएको नेपाली काँग्रेसको आर्थिक नीति २०४६ सालको परिवर्तनपछि उदार अर्थतन्त्रमा रुपान्तरित भएको छ । २०४८ सालदेखि नै नेपाली काँग्रेसमा समाजवादी धारका नेताहरुको पकड कम हुँदै गएको हो ।

२०४८ सालको नेपाली काँग्रेसका सभापति गिरिजा प्रसाद कोइरालको सरकारका पालमा लिइएको उदार अर्थनीतिका कारण नेपालको अर्थतन्त्रमा सकारात्मक परिवर्तनहरु धेरै भएको भए तापनि सामयानुकुल सुधार हुन नसक्दा तथा उदार अर्थनीति लागू गर्ने क्रममा भएका केही त्रुटीहरु समयमै नसच्याइएका कारण उदार अर्थनीति माथि पार्टीभित्रै बुझाइमा एकरुपता छैन ।

एउटै पाटीभित्रै त एकरुपता छैन भने नेकपा एमाले अर्थात् कम्युनिष्ट स्कुलिङबाट आएको पार्टीले नेपाली काँग्रेसको आर्थिक नीतिमा सहमति जनाउने सैद्दान्तिक आधार पनि छैन । तर, नेकपा एमाले सैद्दान्तिकरुपमा कम्युनिष्ट भए पनि उसका ब्यवहार तथा आर्थिक नीतिमा पनि एकरुपता छैन । र, काँग्रेसले गरेको निजीकरणलाई उद्योगधन्धा बेचेको आरोप लगाउँदै आएको छ । यस्तो अवस्थामा गठबन्धन सरकारले निजीकरणलाई कसरी एउटै दृष्टिले हेर्न सक्छ ?

यसैबिच, विपक्षी र आलोचकहरुले यो गठबन्धन काम गर्न नभइ भ्रष्टाचारका ठूला फाइल रोक्न र मिलिभगत राज्यकोषको दोहन गर्न बनेको आरोप लगाइसकेका छन् ।

प्रधानमन्त्री प्रचण्डले विश्वासको मत माग्दै यही असार २८ गते संसदमा भनेका छन्- ‘दुई पार्टी डरले जोडिनुभयो, त्यो सुशासनको डर हो । जुन परिस्थितिमा, जे कारणले कांग्रेस र एमाले मिल्न खोज्नुभएको छ, तपाईहरूको सहकार्यको सहमतिलाई जनताले अनुमोदन गरेको छ कि छैन, आफै मूल्याङ्कन गरिरहनुभएको होला । सामान्यतः लोकतन्त्रमा मुख्य प्रतिस्पर्धी दलहरू मिलेर सरकार बनाउँदैनन् । संसारभरिका इतिहासका अनुभवहरूले देखाएका छन्, त्यस किसिमका गठबन्धनले निरंकुशता र स्वेच्छाचारिता बढाएका छन्, लोकतन्त्रलाई कमजोर बनाएका छन् । त्यसैले सामान्यतः यस्तो अभ्यास हुँदै हुँदैन ।’

नेकपा एमालेको सैद्दान्तिक रुझान कम्युनिष्ट भए पनि पछिल्लो समय केपी ओली प्रधानमन्त्री भएपछिका दिनमा निजी क्षेत्रसँगको बढ्दो हिमचिमले निजी क्षेत्रमैत्री बन्ने प्रयास गरेको देखिन्छ । त्यसैले आजको दिनमा सरकारले चुरोट, जुत्ता बनाउने होइन, नीति बनाउने हो र निजी क्षेत्रलाई काम गर्न दिने हो भन्ने मान्यता नेकपा एमालेमा पनि विकसित भएको देखिन्छ ।

तर, सैद्दान्तिक आधार नभएका कारण नेकपा एमालेले निजी क्षेत्रमैत्री बन्दै गर्दा केहि त्रुटिहरु गरेको छ । २०७४ सालपछि केपी ओली प्रधानमन्त्री हुँदा निजी क्षेत्रको नाममा केहि ब्यापारिक घरानाको लागि फाइदा हुने नीति ल्याएका उदाहरणहरु प्रसस्त छन्। त्यसैमध्ये गिरीबन्धु टी स्टेटकाे विवाद भर्खरैमात्र छताछुल्ल भएकाे छ ।

त्यसैले पौडेललाई पाँचौ पटक अर्थमन्त्री बन्दा प्रधानमन्त्री ओलीको कत्तिको साथ रहन्छ भन्ने प्रश्न पनि महत्वपूर्ण छ । वा, अर्थमन्त्रीका रुपमा अहिलेको अर्थतन्त्रको समस्यालाई निकै गहिरोसँग बुझ्नेगरी अध्ययन गरेर जिम्मेवारी सम्हालेका छन् कि पहिलेको जस्तै ‘चलि त हाल्छ नि’ भन्ने सोचले आएका छन्, त्यो हेर्न कम्तिमा हनिमुन अवधि कुर्नैपर्ने हाेला ।

एकातिर गठबन्धन सरकारका सैद्दान्तिक, ब्यवस्थापकीय तथा ब्यावहारिक बाध्यता अर्कोतिर आफ्नै प्रधानमन्त्रीको हठीपनाका कारण अर्थमन्त्री पौडेलले अर्थतन्त्रको स्लो पिचमा कति रन बनाउलान् त ?

जबसम्म पिचमा दुबै खेलाडी एउटै गतिमा दौडेर रन लिने अनि एउटै लयमा ब्याटिंग गर्ने तादात्म्यता कायम गर्न सक्दैनन्, एउटै खेलाडीले मात्रै खेल जिताएको कमै रेकर्ड छ ।

तर, काँग्रेस-एमालेको गठबन्धनलाई विगतमाजस्तो अहिले गल्ती गर्ने छुट त छैन नै, त्यो भन्दा पनि ठूलो चुनाैति राम्रो काम गरेर युवाहरुको मन जित्नु र अर्थतन्त्रलाई ट्र्याकमा ल्याउनुपर्ने छ ।

होइन भने २०८४ को चुनाव सुखद् नहुने निश्चित छ !

पाैडेलकाे सत्ता यात्रा

२०८१ मा असार ३०, प्रधानमन्त्री केपी शर्मा ओली सरकारका अर्थमन्त्री

२०७९ मा प्रधानमन्त्री पुष्पकमल दाहाल सरकारका अर्थमन्त्री

२०७८ मा प्रधानमन्त्री केपी शर्मा ओली सरकारका अर्थमन्त्री

२०७७ मा प्रधानमन्त्री केपी शर्मा ओली सरकारका अर्थमन्त्री

२०७२ मा प्रधानमन्त्री केपी शर्मा ओली सरकारका अर्थमन्त्री

२०६७ मा प्रधानमन्त्री झलनाथ खनाल सरकारका रक्षामन्त्री

२०६५ मा प्रधानमन्त्री पुष्पकमल दाहाल सरकारका जलस्रोत मन्त्री

२०५३ मा प्रधानमन्त्री लोकेन्द्रबहादुर चन्द सरकारका युवा, खेलकुद तथा संस्कृति मन्त्री

(Published: https://clickmandu.com/2024/07/327198.html)

IMF completes the fourth review of ECF, releases Rs 5.51 billion

The Executive Board of the International Monetary Fund (IMF) on Tuesday completed the fourth review under the four-year Extended Credit Facility (ECF) for Nepal, allowing the authorities to withdraw the equivalent of SDR 31.4 million (about $41.3 million), which is approximately Rs 5.51 billion.

This brings total disbursements under the ECF for budget support thus far to SDR 188.3 million (about $247.7 million).

The ECF arrangement for Nepal was approved by the Executive Board on January 12, 2022 for SDR 282.42 million (180 per cent of quota or about $371.6 million).

Nepal has made good progress with implementation of the programme, which has helped mitigate the impact of the pandemic and global shocks on economic activity, protect vulnerable groups, and preserve macroeconomic and financial stability, a press note issued by the IMF reads.

The programme is also helping to catalyse additional financing from Nepal’s development partners.

The economy continues to face challenges as growth, projected around 3 per cent in fiscal year 2023-24, remains below potential in the context of subdued domestic demand and post-pandemic balance sheet repairs, it reads, adding that economic activity is expected to pick up with growth reaching 4.9 per cent in the fiscal year 2024-25, supported by stronger domestic demand. "The cautiously accommodative monetary policy stance, planned increase in capital expenditure in the fiscal year 2024-25 budget, additional hydropower generation, and a continued increase in tourist arrivals are expected to boost domestic demand and growth."

Inflation is expected to remain within the Nepal Rastra Bank’s (NRB) target ceiling of 5.5 per cent, it adds.

However, the IMF warns of domestic risks dominating the outlook.

"Failure to raise the execution rate of capital projects would deprive the economy of much-needed stimulus and weigh on growth," it warns, adding that fragile political stability could disrupt policy continuity and reform implementation. "Intensification of financial sector vulnerabilities such as a further rise in NPLs or more failures of cooperative lenders could endanger banking system soundness."

Externally, high commodity prices could slow the recovery in energy-intensive sectors. Nepal remains vulnerable to natural disasters.

“Nepal has made important strides on its economic reform agenda," said deputy managing director and acting chair Bo Li, following the Executive Board discussion.

"Decisive actions in monetary policy, bank regulation and rolling off Covid support policies played a major role in overcoming urgent balance of payments pressure in fiscal year 2021-22," Li said, adding that reserves continue to rise without the need to use distortive import restrictions. "Fiscal discipline was maintained in fiscal year 2022-23 and so far in fiscal year 2023-24, despite revenue shortfalls. "Bank supervision and regulation have improved with the rolling out of new supervisory information systems, the Working Capital Loan Guidelines and Asset Classification Regulations."

Nepal’s medium-term outlook remains favourable as strategic investments in infrastructure, especially in the energy sector, are expected to support potential growth.

“With growth below potential, executing the planned increase in capital spending, as envisaged in the fiscal year 2024-25 budget, while maintaining fiscal discipline through domestic revenue mobilisation and rationalisation of current spending remains critical to boost growth and preserve medium-term fiscal sustainability," Li said, adding that strengthening public investment management will support the needed boost to capital spending. "Enhancing fiscal transparency will help contain fiscal risks and further strengthen medium-term fiscal sustainability."

“As monetary policy transmission is still weak in a context of balance sheet repair, a cautious and data dependent monetary policy remains appropriate to preserve price and external stability," he adds.

Saying that continuing to strengthen Nepal’s financial system remains a top priority, he said, financial policy should remain vigilant and focused on building regulatory frameworks that promote sustainable credit growth while proactively addressing emerging vulnerabilities in the savings and credit cooperatives sector. "Maintaining recent reforms regarding lending practices and asset classification is important as preparations for the loan portfolio review of the ten largest banks continue."

The IMF also welcomed Nepal’s commitment to strengthen its AML/CFT framework. "Amendments to a set of fifteen laws, including on money laundering, have been recently enacted—and secondary legislation is under preparation—to bring Nepal’s AML/CFT legal framework in line with international standards, Li said, "It remains critical to ensure the effectiveness of the new legal framework."

The IMF has also suggested reforms to implement the 2021 IMF Safeguards Assessment recommendations regarding the Nepal Rastra Bank (NRB) Act and NRB audit are a priority.

“Continued progress on the structural front remains needed to foster investment and more inclusive growth," Li said, adding that these include improving the business climate, building human capital, and continuing to improve social safety nets, in particular aiming for full execution of the child grant budget, followed by an expansion of the programme to all districts in Nepal.

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.

World Bank and ADB join forces for sustainable development of Nepal’s hydropower sector

The World Bank and the Asian Development Bank (ADB) announced collaboration to strengthen Nepal’s hydropower sector specifically in the context of the proposed Upper Arun and Dudh Koshi hydropower projects.

A memorandum of understanding (MoU) stipulating cooperation between the two institutions for an initial period of five years was signed today on the sidelines of COP28 by World Bank vice president for South Asia Martin Raiser and ADB vice president for Sectors and Themes Fatima Yasmin.

"The full potential of Nepal’s enormous hydropower resources cannot be realised without close partnership between the Nepali government, development partners and the private sector," World Bank vice president for South Asia Martin Raiser said, adding that with the MoU, the ADB and the World Bank are laying the foundations for closer collaboration in financing and policy advice in Nepal’s hydropower sector, with the aim to support the country’s green, sustainable and inclusive development for decades to come.

"This agreement between ADB and the World Bank is a significant step in strengthening Nepal's energy security amid rising demands from population growth and urbanisation," ADB vice president for Sectors and Themes Fatima Yasmin said, adding that it also fosters power trade with neighbouring countries, promoting regional cooperation, economic growth, and green and inclusive development. "ADB is committed to promoting clean energy solutions that align with climate action goals. Our commitment goes beyond generating power; it's also about creating positive impacts on communities, livelihoods, and the environment and contributing to a more sustainable future for all."

The MoU specifically targets three critical areas for collaboration: enhancing country-level collaboration, strengthening co-financing, and boosting joint action on climate change. The pilot approach between the two multilateral development banks provides opportunities for collaboration in knowledge and experience sharing to ensure common understanding of the hydropower sector in Nepal, joint analytical studies, and consultation in support of the development of the hydropower sector.

Under the MoU, the World Bank and Asian Development Bank will also work together on strengthening the institutional capacity of Nepal’s executing and implementing agencies in the development of large hydropower projects, and the preparation and financing of projects in the energy sector. 

This is the first MoU signed between ADB and the World Bank following the joint statement on strengthening collaboration for greater impact issued by the heads of multilateral development banks at the World Bank-IMF Annual Meetings in Marrakech in October, 2023.

Government, stakeholders discuss actions and investment priorities for GRID

The World Bank and Finance Ministry convened a high-level roundtable meeting today on investment priorities and enabling policies to operationalise Nepal’s vision for Green, Resilient, and Inclusive Development (GRID).

Government officials and development partners including Asian Development Bank (ADB), France, Australia, UK, Republic of Korea, European Union (EU), Germany, Japan, Finland, International Monetary Fund (IMF), Norway, Switzerland, the United States of America (USA), United Nations (UN, World Bank Group, International Center for Integrated Mountain Development (ICIMOD), and Association of International NGOs; as well as representatives from civil society, the private sector, youth groups, and think tanks participated in the event and took stock of efforts to implement GRID since the government and development partners endorsed the Kathmandu Declaration on GRID in September 2021.

“Nepal formally adopted the integrated approach to green, resilient, and inclusive development, or GRID, as its national development vision,” said chief secretary Shanker Das Bairagi, on the occasion. "This approach can be an engine of sustainable growth, good jobs and livelihood opportunities, and resilience in the face of multiple risks.”

The Roundtable also reviewed priority actions in the government’s emerging draft GRID strategic action plan including managing land, water, and forests in a more productive, sustainable, and integrated way; equipping people with new skills and resilient livelihoods; greening urban development; scaling up water supply and sanitation, managing pollution and waste; scaling up renewable energy; boosting the sustainability and resilience of the transportation system; strengthening disaster risk management and financing; and enhancing social protection to be responsive to shocks, according to a press note issued by the World Bank.

“Green, resilient, and inclusive development is about lifting incomes, improving opportunities for all, and achieving growth in harmony with nature,” World Bank vice president for the South Asia Region Martin Raiser said, adding that the World Bank and development partners are fully committed to supporting Nepal's GRID priorities and we are excited to see the impactful outcomes of GRID unfold.

Nepal’s draft GRID strategic action plan defines an economy-wide shift to a GRID development path, and specifies a set of high-priority investments with ready financing and a set of priority policy commitments. The priorities in the strategic action plan derive from Nepal’s key development, climate, environmental, and sector strategies. Financing sources include public expenditure from the government, overseas development assistance, innovative financing such as carbon finance, and private sector investment.

The event also served to consolidate the GRID partnership led by the government, which has grown to 20 development partners. In addition, the event was a milestone for the government to begin consultations with provincial and local governments and other stakeholders on the emerging strategic action plan. "It is anticipated the strategic action plan will be further refined and finalized this year," the press note reads.

हरित, उत्थानशील र समावेशी विकासका कार्य र लगानी प्राथमिकतामाथि छलफल

विश्व बैंक र अर्थ मन्त्रालयले नेपालको हरित, उत्थानशील र समावेशी विकास (ग्रिड) सम्बन्धी दृष्टिकोणको प्रभावकारी कार्यान्वयनका लागि आवश्यक पर्ने लगानी प्राथमिकता र अनुकूल नीतिहरूबारे छलफल गर्न आज काठमाडौंमा एक उच्चस्तरीय गोलमेच बैठक आयोजना गर्यो । 

कार्यक्रममा सरकार र विकास साझेदारहरूका साथै नागरिक समाज, निजी क्षेत्र, युवा समूह र प्रबुद्ध वर्गका प्रतिनिधिहरूको सहभागिता रहेको थियो । सो अवसरमा सहभागी प्रतिनिधिहरूले नेपाल सरकार र विकास साझेदारहरूबाट असोज २०७८ मा ग्रिड सम्बन्धी “काठमाडौं घोषणापत्र” संयुक्त रूपमा अनुमोदन गरिएयता भएका कार्यान्वयन प्रयासहरूको लेखाजोखा गरेका थिए ।

विकास साझेदारहरूमा हाल एसियाली विकास बैंक, फ्रान्स, अष्ट्रेलिया, संयुक्त अधिराज्य, गणतन्त्र कोरिया, युरोपेली संघ, जर्मनी, जापान, फिनल्याण्ड, अन्तर्राष्ट्रिय मुद्रा कोष, नर्वे, स्विट्जरल्याण्ड, संयुक्त राज्य अमेरिका, संयुक्त राष्ट्रसंघ, विश्व बैंक समूह, अन्तर्राष्ट्रिय एकीकृत पर्वतीय विकास केन्द्र (इसिमोड), अन्तर्राष्ट्रिय गैरसरकारी संस्था संघ लगायत बैठकमा उपस्थित थिए।

नेपालले  राष्ट्रिय विकासको दूरदृष्टिका रूपमा हरित, उत्थानशील र समावेशी विकास (ग्रिड) सम्बन्धी अवधारणालाई औपचारिक रूपमै अंगीकार गरेको मुख्य सचिव शंकर दास बैरागीले बताए । “विभिन्न जोखिमहरूका बीच यो अवधारणा समृद्धि, दिगो आर्थिक वृद्धि, राम्रा रोजगारी र जीविकोपार्जनका अवसर एवं उत्थानशीलताको एउटा साधन बन्न सक्छ,” उनले भने । 

उक्त गोलमेच बैठकले सरकारको मस्यौदा ग्रिड रणनीतिक कार्ययोजनामा उल्लेखित प्राथमिकता प्राप्त कार्यहरूको समेत समीक्षा गर्यो । ती प्राथमिकताप्राप्त कार्यहरूमा जमिन, जल र वनलाई थप उत्पादनशील, दिगो र एकीकृत रूपमा व्यवस्थापन गर्ने, मानिसहरूलाई नयाँ सीप र उत्थानशील जीविकोपार्जनबाट सुसज्जित बनाउनेस सहरी विकासलाई हरित बनाउने, खानेपानी तथा सरसफाइको पहुँच र प्रदूषण तथा फोहोरमैला व्यवस्थापन अभिवृद्धि गर्ने, नवीकरणीय ऊर्जा विस्तार गर्ने, यातायात प्रणालीको दिगोपना र उत्थानशीलता बढाउने, विपद् जोखिम व्यवस्थापन र वित्तीय लगानी सुदृढ गर्ने र विपदबाट आइपर्ने आघातहरूप्रति अनुकूलन हुन सामाजिक सुरक्षालाई सबल बनाउने  रहेका छन् ।

हरित, उत्थानशील र समावेशी विकासले आयस्रोत बढाउने, सबैका लागि अवसरहरू सुधार गर्ने, र प्रकृतिसँगको सामन्जस्यतामा वृद्धि हासिल गर्ने कार्य गर्छ भन्दै दक्षिण एसिया क्षेत्रका लागि विश्व बैंकका उपाध्यक्ष मार्टिन रेजरले भने, “ग्रिड सम्बन्धी प्राथमिकताहरूलाई साकार पार्न विश्व बैंक लगायत अन्य विकास साझेदारहरू पूर्णरूपमा प्रतिवद्ध छौं र हामी नेपालमा यसको प्रभावकारी नतिजाहरू हेर्न उत्सुक छौं ।”

विश्व बैंकका अनुसार नेपालको मस्यौदा ग्रिड रणनीतिक कार्ययोजनाले ग्रिड विकासको मार्गतर्फ जान अर्थतन्त्रव्यापी परिवर्तनको व्यवस्था गर्नुका साथै तयारी अवस्थामा रहेका बित्तिय प्रावधान सहितको उच्च प्राथमिकताका लगानी र प्राथमिकता प्राप्त नीतिगत प्रतिवद्धताहरू निर्दिष्ट गरेको छ । रणनीतिक कार्ययोजनाका प्राथमिकताहरू नेपालका प्रमुख विकास, जलवायु, वातावरणीय र क्षेत्रगत रणनीतिहरूबाट साभार गरिएका छन् । यसका वित्तिय स्रोतहरूमा नेपाल सरकारको सार्वजनिक खर्च, वैदेशिक विकास सहायता, कार्बन वित्त जस्ता नवीनतम स्रोत र निजी क्षेत्र लगानी रहेका छन् ।

उक्त बैठकले नेपाल सरकारको नेतृत्वमा रहेको ग्रिड साझेदारीलाई थप मजबूत बनाएको छ । यसका २० वटा विकास साझेदार छन् । साथै, उक्त बैठक आसन्न रणनीतिक कार्ययोजनाका सम्बन्धमा प्रदेश तथा स्थानीय सरकार र अन्य सरोकारवालाहरूसँग परामर्श सुरू गर्न सरकारका लागि एउटा कोशेढुंगा बनेको पनि विश्व बैंकको बुझाइ छ । सो रणनीतिक कार्ययोजनालाई थप परिष्कृत गरी यसै वर्ष अन्तिम रूप दिने अपेक्षा पनि विश्व बैंकले गरेको छ ।

Central bank removes cash margin in import

The central bank has removed the cash margin provision for imports, which the importers need to maintain against Letters of Credit (LCs), while importing goods.

As the foreign exchange (forex) reserve has been comfortable, the Nepal Rastra Bank (NRB) has removed the cash margin provision for imports, confirms a press note issued by the central bank today.

“All types of cash margin arrangements have been removed,” the circular reads, asking the banks and financial institutions (BFIs) concerned not to consider the cash margin. With the new rule, now businessmen do not have to keep any kind of cash margin for imports, which will encourage them for more imports.

The central bank had imposed cash margin of 50 per cent to 100 per cent on LC – for the import of around 300 goods, including automobiles – since last 1 year to tighten the imports after depleting forex reserve. Last month, the central bank has removed the provision of cash margin on the import of construction materials.

Earlier, traders were required to maintain a cash margin of only 5 per cent to 10 per cent of the value of goods, while importing goods but the central bank and the government tighten the imports raising the cash margin upto 50 per cent to 100 per cent to restrict imports that has sucked the forex reserve.

The private sector and International Monetary Fund (IMF) have been opposed to import restriction, as according to the data only import restriction has not pushed forex reserve up rather the government revenue – customs – dropped drastically. As result, the government lifted the seven-month-old ban on the import of ‘luxury goods’ last month to meet a condition of the IMF ahead of the formation of a new government.

The IMF has delayed the second installment of a $398.5 million loan approved for Nepal due to import restriction. The IMF – in In January 2022 – had approved the extended credit facility for Nepal. Of the total amount, Nepal received $ 110 million as the first installment. But IMF delayed the second installment, which is around $ 55 million.

According to the central bank records, the forex reserves reached Rs 1.292 trillion in the first five months of the current fiscal year. “The amount will be sufficient for Nepal to import goods and services for the next 8.7 months,” the central bank’s monthly macroeconomic report reads, adding that the remittance inflow has touched Rs 480 billion in the first five months of the current fiscal year. “Compared to the amount received in the same period of last fiscal year, this is an increase of 23 per cent. 

In US dollars terms, Nepal received $3.71 billion in five months, which is a 13.1 per cent growth from the dollar value of the amount received in the same period of the last fiscal year. The increase in remittance inflow has improved the forex reserve giving the central bank and the government confidence to ease imports.

After easing the import ban, the central bank should control the credit on imports using monetary tools as the dollar earning – that could help increase forex reserve – is limited to remittance due to poor exports and Covid-19-hit tourism industry.

Public debt doubles in five years

 The public debt has been doubled in the last five years, coinciding with the first tenure after Nepal became a federal republic.

The significant increase has been recorded since the 2017 elections, when the full-fledged federal government came to power, with seven provincial and 753 local governments. However, the federalism has little contribution in whooping increase in public debt compared to lack of good governance and fiscal discipline.

According to Public Debt Management Office, the ratio of public debt to GDP is 41.38 per cent. "The ratio of external debt to total GDP is 21.64 per cent, whereas the ratio of internal debt to total GDP is 19.73 per cent."

Nepal's GDP is currently valued at Rs 4,851 billion, according to the Central Bureau of Statistics (CBS).

In the fiscal year 2017-2018, Nepal had around Rs 917 billion public debt. But the amount has steadily increased to Rs 1,048 billion in 2018-19; Rs 1,433 billion in 2019-20; Rs 1,737 billion in 2020-21, and finally reaching to Rs 2,013 billion in the last fiscal year 2021-22, according to the Public Debt Management Office data.

As of the first quarter of the current fiscal year 2022-23, the country’s public debt totals to Rs 2,007.84 billion.

Among, the public debt, the external and domestic debt are almost equal.

The external debt stands at Rs 1,050.23 billion, while domestic debt is at Rs 957.61 billion, according to the data.

The debt, however, decreased by 0.27 per cent as of mid-October, compared to the Rs 2,013.29 billion recorded in mid-June. "The external debt increased by Rs 24.38 billion during the first quarter of the current fiscal year, whereas domestic debt decreased by Rs 29.83 billion," the data revealed.

The government has received Rs 24.70 billion in debt from development partners, in the first three months of the current fiscal year. However, it has not mobilised domestic debt yet, but preparing.

The government has cleared a total of Rs 5.84 billion (approximately $51 million) external loans in the first quarter of the current fiscal year 2022-23. But the liability of foreign loans increased by Rs 5.52 billion due to depreciation of Nepali currency against the US dollar, according to the office.

Top 10 Creditors

International Development Association (IDA) -- Rs 526.18 billion

Asian Development Bank (ADB) -- Rs 323.64 billion

Japan International Cooperation Agency (JICA) -- Rs 48.41 billion

International Monetary Fund (IMF) -- Rs 43.89 billion

EXIM Bank Line of Credit-India -- Rs 37.56 billion

Exim Bank of China -- Rs 33.51 billion

International Fund for Agricultural Development -- Rs 10.25 billion

OPEC Fund for International Development -- Rs 8.38 billion

Exim Bank, Korea -- Rs 5.62 billion

European Investment Bank (EIB) -- Rs 5.61 billion

IMF residential office returns to Kathmandu, after 12 years

After 12 years of closing its unit in the country, the International Monetary Fund (IMF) is reopening its residential office in Nepal.

The IMF has appointed Teresa Daban Sanchez as the resident representative for Nepal, according to the IMF that has been looking after Nepal affairs from the Delhi-based office currently. “The Delhi office of the IMF has been looking after the affairs of Nepal, India and Maldives,” it added.

Earlier, the IMF office left Nepal citing its own financial problem.

Recently, the multilateral development partner has also approved loans of $ 398.50 million under Extended Credit Facility (ECF) to Nepal as the country battles to maintain its foreign currency reserves.

With the return of IMF office in Kathmandu, the foreign direct investment is expected to get a boost, apart from building confidence for the domestic investors also, as it will help Nepal with budgetary assistance to push the depleting foreign currency reserve (forex reserve) up.

IMF executive board approves $395.9 million ECF arrangement for Nepal

The executive board of the International Monetary Fund (IMF) approved a 38-month arrangement under the Extended Credit Facility (ECF) for Nepal in an amount equivalent to SDR 282.42 million (180 per cent of quota or about $395.9million). The ECF arrangement will assist the authorities’ Covid-19 response in mitigating the pandemic’s impact on health and economic activity, protect vulnerable groups, preserve macroeconomic and financial stability, and support sustained growth and poverty reduction, according to a press note issued by the IMF. "The programme will help fill financing gaps and will catalyse additional financing from Nepal’s development partners."

Approval of the ECF arrangement enables immediate disbursement of SDR78.5 million (50 per cent of quota, about $110 million) usable for budget financing. This follows Fund emergency support to Nepal in May 2020 under the Rapid Credit Facility (100 per cent of quota, SDR 156.9 million, equivalent to $214 million at the time of approval).

The Covid-19 pandemic is taking a heavy toll on Nepal’s economy. From April to July 2021, Nepal suffered a devastating second wave of Covid-19, interrupting a gradual recovery in economic activity. GDP contracted by 2.1 per cent in the last fiscal year 2019-20, staff estimate a partial recovery of growth at 2.7 per cent for fiscal year 2020-21 and forecast growth of 4.4 per cent in fiscal year 2021-22. The collapse of the tourism and service sectors, which are key drivers for growth, will take time to recover. After a sharp drop in 2020, imports have rapidly grown, fueling a large current account deficit (8.3 per cent of GDP in the fiscal year 2020-21). Gross international reserves remain adequate but have begun to decline in recent months. The Covid-19 shock affected both revenues and expenditures with the fiscal deficit expected to widen from 4.2 per cent of GDP in the fiscal year 2020-21 to 6.3 per cent of GDP in the fiscal year 2021-22.

The Fund-supported programme under the ECF has three main objectives, aligned with the government’s Relief, Restructuring, and Resilience (3R) plan. First, mitigating the Covid-19 impact on health and economic activity, and protecting vulnerable groups, including by making room in the budget for health, social assistance, and job support, while enhancing fiscal transparency and governance. Second, preserving macroeconomic and financial stability, including by maintaining a prudent fiscal stance, preserving reserve adequacy, and strengthening financial sector regulation and supervision. Third, supporting a reform agenda that leads to sustained growth and poverty reduction over the medium term, including by implementing cross-cutting institutional reforms that improve governance and reduce corruption vulnerability.

"The Covid-19 pandemic severely impacted Nepal’s economy, including through a decline in tourism and domestic activity and volatile remittances," at the conclusion of the executive board’s discussion, deputy managing director and acting chair Bo Li said. "Households are experiencing an ongoing shock to income and social assistance programs have limited coverage, implying a likely setback to poverty alleviation gains in recent years," he said, adding that important fiscal and external financing needs remain to support the Covid-19 response, facilitate a continued recovery, and maintain a comfortable level of reserves. "The Extended Credit Facility arrangement will support the government’s priorities, to mitigate the pandemic’s impact on health and economic activity and protect vulnerable groups; preserve macroeconomic and financial stability; support sustained growth and poverty reduction; and catalyse additional external financing."

It will also help anchor and leverage the Fund’s capacity development strategy in Nepal, he added.

"Fiscal policy in the early part of the programme accommodates priority spending to address health needs, support the economy, and protect the most vulnerable," he said, adding that fiscal deficits would gradually decline once the health crisis wanes, helping to ensure debt sustainability, while also accommodating the authorities’ commitment to further enhance social safety nets. "A comprehensive fiscal structural reform agenda underpins the programme, with both revenue mobilisation and public financial management reforms to address the public investment efficiency gaps, strengthen fiscal risk management, improve public debt and cash management, and help advance fiscal federalism in a fiscally prudent manner." 

Moving ahead with reforms to further enhance fiscal transparency and reporting will be important, he added. "The gradual unwinding of accommodative monetary policy and the authorities’ commitment to remain vigilant toward emerging risks in the external and financial sectors are welcome."

Suggesting to strengthen financial sector regulation and supervision, he urged that progress is needed on policies that preserve the stability of the financial system while supporting growth through ensuring the availability of adequate and timely supervisory data, updating the regulatory framework to better capture risks including to banks’ asset quality, and enhancing the quality of supervision. "Measures set out under the programme to further improve the autonomy and accountability framework of the central bank would support this agenda."

"Sustained structural reform efforts are necessary to enhance the business environment, strengthen climate resilience, and raise medium-term growth," he further suggested, adding, "To this end, the programme supports several cross-cutting institutional reforms that address governance, vulnerability to corruption, and efficiency of the public sector."

Platform for collaboration on tax strengthened support to countries during the Covid-19 pandemic

The Platform for Collaboration on Tax (PCT) – a joint initiative of the IMF, OECD, UN and the World Bank (WB) – enhanced its support to countries in the area of domestic resource mobilisation during the Covid-19 pandemic, according to the PCT Progress Report 2021.

The report, released today, highlights that the PCT Partners are committed to deepening their tax collaboration further with a revamped work program to help countries develop resilient tax systems and better fiscal policies in response to the crisis.

The PCT Progress Report 2021 examines activities that the PCT has undertaken in five focus areas since July 2020: medium-term revenue strategies (MTRS), Covid-19, tax and sustainable development goals (SDGs), international taxation, and coordination. The new workstreams reflect the changing global tax landscape and the challenges of the pandemic for governments and policymakers as countries around the world try to balance the increased spending and lower revenues due to the Covid-19 crisis.

During this period, the PCT Partners increased their support to countries through the release of joint knowledge products, technical assistance concerning tax-related responses to the crisis, and workshops on critical issues, as the report reveals. The PCT released the final versions of two toolkits on Transfer Pricing Documentation and Tax Treaty Negotiations with virtual consultations and public workshops, hosting over 1,300 participants from governments and other stakeholders.

Additionally, the PCT Secretariat collaborated with the African Tax Administration Forum (ATAF) and the Asian Development Bank (ADB) to hold three regional workshops on MTRS, which provided 53 governments from Africa, Asia and the Pacific with a platform to exchange information on how the MTRS can benefit their tax system reform in the face of the pandemic. The PCT Partners also raised awareness on the role of taxation in promoting gender equality and growth through a joint blog and a public workshop.

The report illustrates that the PCT website continues to serve as a global resource on international taxation for tax officials from developing and emerging economies with its enriched content. The MTRS resource page, the e-learning calendar of the PCT Partners’ tax-related courses and the regularly updated Online Integrated Platform, which is the public database of domestic resource mobilisation activities and projects of the Partners, are among the new and existing products that provide countries with capacity-building support and transparent information.

Looking ahead, the PCT Partners will, in the coming months, focus on areas where coordination brings the most value by identifying new priorities and activities for their work in light of the recent developments in the global tax agenda. Further activities on the interconnection between tax and SDGs, more and improved resource pages on the PCT website and expanded engagement with countries on the PCT toolkits and MTRS are among the future PCT initiatives that aim to offer tax officials more capacity-building tools and resources.

The Platform for Collaboration on Tax (PCT) is a joint initiative of the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations (UN) and the World Bank Group (WBG). The PCT Secretariat is generously supported by the governments of France, Japan, the Netherlands, Norway, Switzerland, and the United Kingdom, according to the IMF.

IMF cuts global economy forecast amid Delta surge, vaccine divide

The International Monetary Fund (IMF) yesterday slightly revised down its global economic forecast amid the Delta variant-fueled Covid-19 surge, highlighting the 'great vaccine divide', supply bottlenecks and inflation risks.

"The global recovery continues but momentum has weakened, hobbled by the pandemic," IMF chief economist Gita Gopinath told a virtual press conference during the annual meetings of the IMF and the World Bank Group.

In its newly released World Economic Outlook (WEO), the IMF projected the global economy to grow by 5.9 per cent in 2021, down by 0.1 percentage points from July's forecast, while noting that the 'modest headline revision' for the global economy 'masks large downgrades' for some countries.

Noting that overall risks to economic prospects have increased and policy trade-offs have become 'more complex,' Gopinath said the outlook for the low-income developing countries, in particular, has 'darkened considerably' due to worsening pandemic dynamics.

Low-income developing countries are on track to grow by 3 per cent this year, down by 0.9 percentage point from July's forecast, the report showed.

Stressing that a 'dangerous divergence' in economic prospects across countries remains a major concern, Gopinath said these divergences are a consequence of the 'great vaccine divide' and large disparities in policy support.

"We are very concerned -- about the vaccine divide -- and we are doing everything that we can to make the case to be clear on the numbers, which are troubling,"  deputy director of the IMF's Research Department Petya Koeva Brooks said, adding that about 60 per cent of the population in advanced economies is fully vaccinated and about a third in emerging markets, whereas the corresponding number for low income countries is below five percent of the population.

The IMF urged the global community to step up efforts to ensure equitable vaccine access for every country, overcome vaccine hesitancy where there is adequate supply, and secure better economic prospects for all.

Recent pledges by China, the Group of Seven (G7) industrialised nations, and other countries in that direction are 'welcome' steps, though donations should be accelerated to rapidly fulfill the commitments, according to the report. "the advanced economies are on track to grow by 5.2 per cent this year, down by 0.4 percentage point from July's forecast, which reflects more difficult near-term prospects, in part due to supply disruptions."

The United States and the euro area are projected to see economic growth of 6 per cent and 5 per cent respectively.

While investors still expect recent price pressures to moderate and then gradually subside, they have also highlighted the possibility that supply chain disruptions and shortages of labor and materials may be 'more persistent than currently anticipated,' leading to an unmooring of inflation expectations, according to the IMF's Global Financial Stability Report released on Tuesday.

Looking ahead, the IMF urged central banks to provide 'clear guidance' about the future stance of monetary policy to avoid an unwarranted tightening of financial conditions and minimise the risk of market volatility.

The multilateral lender projects that headline inflation will likely return to pre-pandemic levels by mid-2022 for the group of advanced economies and emerging and developing economies. There is, however, considerable heterogeneity across countries with upside risks for the United States, Britain, and some emerging market and developing economies.

Emerging market and developing economies are projected to grow by 6.4 per cent in 2021, up by 0.1 percentage points from July's forecast, which is in part due to the upgraded projections for some commodity exporters on the back of rising commodity prices, the report added.

Nepse posts three historic records, all-time high index, largest turnover and highest number of transaction

 It seems coronavirus crisis has not any negative impact on domestic market as the Nepse index went up by 0.98 per cent or 18.43 points to close at 1,893.24 points – the highest in the history – today. The previous highest close was 1,881.45 on July 27, 2016.

Though the Nepse index scaled as high as 1,926.91 points – during the intraday session today – it settled to close at 1,893.24 points also with the highest turnover of Rs 7.61 billion, which is also the record turn over in the market till date. Likewise, the secondary market witnessed some 17,188,099 shares of 201 listed firms are traded through 70,003 transactions, which is also the highest number of transactions in a single trading day, today the last trading day of the week.

Since the banks and financial institutions are flushed with lonable liquidity, and there is no other investment opportunity in the market due to coronavirus induced slowdown in economy, the investors have been putting their money on share, according to the analysts. “The change in guard in the Finance Ministry has also played the catalyst to push the share market up,” they claimed, as the incumbent finance minister Bishnu Prasad Poudel is considered market friendly, compared to his predecessor Dr Yuba Raj Khatiwada. 

The float index gained 1.45 points and closed at 128.54 while the sensitive index closed at 365.18 points after gaining 2.85 points, according to the Nepse, that is yet dominated by the banks and financial institutions. The banking index gained the most 2.7 per cent helping to push the Nepse up.

Nepal Reinsurance Company (NRIC) has the highest individual scrip turnover of Rs 581.3 million, whereas the shares of Prabhu Bank (PRVU) was the highest trading today. Likewise, four companies that hit the 10 per cent positive circuit today are NMB Laghubitta Bittiya Sanstha (NMBMF), Panchthar Power Company Ltd (PPCL), Himalaya Urja Bikas Company (HURJA), and Ankhukhola Hydropower Company Ltd (AKJCL).

The Salt Trading Corporation (STC) has however lost the most at 6.18 per cent. The trading index lost the most at 5.33 per cent.

The the Nepse index and gross domestic production (GDP) has had the positive correlation in the past years, it seems to have the negative correlation this fiscal year. In the past years, the Nepse has recorded highest when the GDP also posted high in the respective fiscal years. But this fiscal year, the GDP seems to be hovering between 0 to 2 per cent, according to the projections from multilateral development partners including Asian Development Bank (ADB), World Bank (WB) and International Monetary Fund (IMF), and also the Central Bureau of Statistics (CBS), and National Planning Commission (NPC).     

DATES TO REMEMBER
The lowest index level was on June 15, 2011 – 292.00
The highest index was on July 27 2016 – 1,881.45
The lowest Index level on March 3, 2019 – 1,100.58
The highest index is on today, Nov 26 2020 – 1893.25

IMF forecasts zero per cent economic growth last fiscal year

Nepal is growing at zero per cent in the last fiscal year as Covid-19 continues to wreak havoc on the economy, according to the latest forecast of the International Monetary Fund (IMF).

“Nepal’s economic growth remained flat in the last fiscal year 2019-20,” the World Economic Outlook (WEO) released today by the IMF reads.

Though, the World Bank has forecast 0.6 per cent economic growth, and Central Bureau of Statistics (CBS) has forecast 2.27 per cent economic growth, the IMF has downgraded Nepal’s growth forecast to zero percent for the last fiscal year. The IMF growth projection of Nepal is far lower than the government’s target to achieve seven per cent of growth in the current fiscal year.

The IMF has, however, projects that Nepal’s economy would grow by 2.5 per cent in the current fiscal year 2020-21. 

The IMF has also projected a deep recession in 2020. “Global growth is projected to be -4.4 per cent, an upward revision of 0.8 percentage points compared to its June update,” the report reads.

“The upgrade owes to somewhat less dire outcomes in the second quarter, as well as signs of a stronger recovery in the third quarter, offset partly by downgrades in some emerging and developing economies,” said the IMF’s chief economist Gita Gopinath.

Debt burden of LDCs continues to climb to a record $744 billion

 In response to an urgent need for greater debt transparency, the latest edition of the International Debt Statistics (IDS) report provides more detailed and more disaggregated data on external debt than ever before in its nearly 70-year history, including breakdowns of what each borrowing country owes to official and private creditors in each creditor country, and the expected month-by-month debt-service payments owed to them through 2021.

Before the onset of the Covid-19 pandemic, rising public debt levels were already a cause for concern, particularly in many of the world’s poorest countries as discussed in our Four Waves of Debt report published in December 2019. Responding to a call from the World Bank (WB) and the International Monetary Fund (IMF), the G20 endorsed the Debt Service Suspension Initiative (DSSI) in April 2020 to help up to 73 of the poorest countries manage the impact of the Covid-19 pandemic.

According to the 2021 IDS report the total external debt of DSSI-eligible countries climbed 9.5 per cent to a record $744 billion in 2019 from the previous year highlighting an urgent need for creditors and borrowers alike to collaborate to stave off the growing risk of sovereign-debt crises triggered by the Covid-19 pandemic. The pace of debt accumulation for these countries was nearly twice the rate of other low- and middle-income countries in 2019.

Nepal to grow at 2.1 per cent this fiscal year

Though, the government has claimed to grow economy at 7 per cent, the World Bank has estimated to grow it at a nominal 2.1 per cent in the current fiscal year. The World Bank has also decreased last fiscal year’s economic growth rate to 1.8 per cent, from its earlier projection of somewhere between 1.5 per cent and 2.8 per cent, against the Central Bureau of Statistics’ (CBS) estimation of 2.3 per cent.
Economic growth is estimated to contract sharply to 2.1 per cent in the fiscal year 2020-21 from the Covid-19 pandemic and related lockdown, despite efforts by the government to curb the economic fallout from the crisis, reads the World Bank’s latest Nepal Development Update (NDU). Transitioning the economy from the relief stage through to restructuring and resilient recovery requires a strategic approach to get the country back on a sustainable and inclusive growth path, it reads, adding that the economic activity in the tourism sector will remain weak and remittances inflows will be moderate. “Supply chain disruptions will keep industrial and agricultural production low.”
Likewise, low economic activity and oil prices will also keep imports low and below the pre-crisis levels, leading to a projected narrowing of the current account deficit to 6.5 per cent of GDP, it adds. “Lower imports will continue to limit revenue collection.”
However, fiscal measures announced as part of the fiscal year fiscal year 2020-21 budget, including a revision of custom duties, will provide some support to the budget as spending levels on relief and recovery efforts remain elevated. “Taken together, the fiscal deficit is projected to marginally decline to 6.6 per cent of GDP in fiscal year 2020-21,” it adds.
While the government has adopted various relief measures to contain the pandemic, reduce the impact on households and provide economic support to the most vulnerable firms, the report highlights the importance of reforms to support a resilient recovery.
“For a resilient recovery and inclusive growth, economic support measures to firms and workers in the informal sector will be important,” World Bank senior economist and author of the update Dr Kene Ezemenari said, adding that incentives to agribusiness-based and forest-based SMEs, with a focus on returnee migrants and youths, could help increase employment and food security. “Inclusive growth could be further promoted through entrepreneurship support programmes and grants to small and medium enterprises.”
The report also outlines four pillars in the areas of health, social support, economic support and cross-cutting priorities including fiscal sustainability and focus on digital and green economies. This includes measures to strengthen the health system and scale up social protection systems, including the adoption of a social registry to make these systems more resilient against future shocks. Enhanced school sanitation and health protocols including health screening, water and sanitation facilities would be needed to enable a return to schooling for children.
“In the rapidly unfolding global scenario brought by Covid-19, insights from the Nepal Development Update on Nepal’s outlook, challenges and way forward is very helpful,” finance minister Dr Yuba Raj Khatiwada said, after launching the report.
Claiming that the government will achieve the target of 7 per cent economic growth for the current fiscal year, he painted the rosy picture of economy, though the economy has shattered due to the lackdown imposed by the government – to contain Covid-19 spread – from March 24. The service sector that has more than 50 per cent contribution to the economy has bleed red due to the lockdown, which has also pushed a sizable number of population into the poverty trap.
The finance minister, however, boosted that the exports have grown and imports have dropped in the last fiscal year. He also claimed that the government has been successful in budget implementation in the last fiscal year, though the government has transferred money from various funds to meet the revenue target. “We need to address the crisis with macroeconomic and sectoral policy focused on fiscal sustainability, financial sector stability, a digitally-oriented green economy and resilient public services,” he said, appreciating the rapid action taken by the development partners including the World Bank, Asian Development Bank, IMF and others for providing Nepal with tangible resources and support to maintain our fiscal balance and accelerate growth and inclusive development.
Expansionary fiscal and monetary policies will be important in the initial relief stage to support banking sector liquidity and provide relief to households and firms. From restructuring through to resilience, expansionary and monetary policies will help pave the way for strengthening financial sector stability in the long run while also building resilient public services and green growth through sustainable and resilient infrastructure, strengthened solid waste management and air and water pollution control.
Related investments and reforms would be critical to expand coverage of digital services and infrastructure to support e-services and help promote e-commerce. It would also help expand the reach and coverage of mobile banking and digital financial services to underpin development of e-commerce. However, digitisation is also limited across the economy. “Addressing this will require removal of access restrictions to any under-utilised fiber optic backbone managed by the governments and public utilities and the introduction of appropriate rules to manage conditions of access, capacity allocation, and access pricing,” he said, “This would also help expand access in rural and remote areas.”
For Nepal to emerge stronger from the crisis, it is important to adapt quickly to the new reality,” World Bank country director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos said, adding that the World Bank is encouraged to note the early start made by the government with the development of Nepal’s Relief, Restructuring and Resilience plan and are committed to work together with multilateral development banks and development partners in helping the country build back greener and better.