Kathmandu: Amid the widespread fear that the country’s economy is heading towards total collapse Prime Minister Pushpa Kamal Dahal and Finance Minister Prakash Sharan Mahat have said that works are underway to bring the economy back on track and therefore people do not need to panic.
While addressing the Nepal Trade Summit-2023 organized by the Confederation of Commercial Banks and Financial Institutions Nepal (CBFIN) in the capital on Sunday, PM Dahal said that economic situation is not as worrisome as thought by the people while adding that the government is committed to changing the situation by addressing the problems. “Last year, panic was created alleging that Nepal’s economy is about to go bankrupt like that of Sri Lanka. But now, there is no such situation,” he said. “The government has focused on how to ease the economic situation.”
Saying that global COVID-19 pandemic, the Russia-Ukraine war and various other global events affected Nepal’s economy, he urged all to be responsible and put in efforts for economic improvement. The PM also stressed the need for all sectors, including the government, development partners, main political parties and other stakeholders, to come together to expedite economic activities of the country. “Amidst vivid challenges, the nation’s economy is gradually taking a path of improvement and it has been reflected in national and international data,” he said.
Amid the projections of the International Monetary Fund and the World Bank about the possibility of economic slowdown in other developed and developing countries, PM claimed that Nepal’s economy is gradually improving. “We observe the balance of payment surplus for some time and the status of Forex has improved, the quantity of imports has decreased and the rise in remittance inflow is encouraging,” he said. “The external indicators of the nation’s economy are improving. “
PM Dahal further said that Nepal needs to increase domestic and foreign investment in agriculture and forest, hydropower, tourism and IT to achieve a rapid economic growth. According to the Prime Minister, promoting agriculture, tourism, hydropower and entrepreneurship and improving exports are the priorities of the government.
On the occasion, Finance Minister Prakash Sharan Mahat said that the government will take initiatives to resolve the problems through the monetary policy. “We are unable to flow capital through the fiscal policy. We lack resources to increase fiscal space,” he said, adding that the government is not in a situation wherein it can do work through the fiscal policy as the revenue collection is very low.
He further said that Nepal Rastra Bank is working to review the fiscal policy towards mid-May. “We must focus on creating a climate of investment by decreasing interest rates through monetary equipment,” he said. He admitted that the government could not effectively spend the development budget in time and that the economy could not be dynamic due to failure to increase capital expenditures.
“Now, it seems the economy is weak and in trouble. Internal trade and business is weak. Inflation is under control. But, there are problems. Industries and trade are in problems due to bank interest pressure. Revenue collection is not satisfactory as well,” he said.
Stating that the government’s efforts alone would not be enough, he called for all sectors to come together for economic improvements.