Economic crisis still looming
By Our Reporter
No matter what claims have been made by Prime Minister Pushpa Kamal Dahal and Finance Minister Prakash Sharan Mahat regarding the economy, Nepal is still reeling under an economic crisis. It is evident from the growing worries expressed by the business leaders and noted industrialists. Almost all industrialists have been arguing that they are not in a position to continue their production because of the faulty tax and interest policies of the government.
Even the latest statements by Finance Minister Mahat himself and Finance Secretary Krishna Hari Pushkar hinted that the economy is still in bad shape. Minister Mahat started saying that he would improve the economy while until a fortnight ago he was saying that the economy was going well and improving. Speaking at the meeting of the Finance Committee of the House of Representatives on
Tuesday, Secretary Pushkar said that the economy would face further problems if the current revenue policy was not corrected.
He urged the lawmakers to amend the traditional revenue system to avoid further crises in the economy.
Even a layman easily understands how bad is the national economy just looking at the market. Dashain has almost begun, but the shops including the cloth shops of the main markets look completely deserted. No customers could be seen in the shops on New Road and other areas.
Even the government has started collecting debt for failing to meet the revenue target.
Against this backdrop, the World Bank has recently projected that Nepali economy would rebound to 3.9 per cent in the current Fiscal Year 2023/24 downgrading the growth projection of 6 per cent made by the government in its budget speech for this year.
However, this is a ‘significant’ increase from the growth of last FY 2022/23 when the country achieved 1.9 per cent addition in the Gross Domestic Product (GDP) at the constant market prices while the government had announced to achieve an 8 per cent expansion in the economy.
This forecast is made citing the lagged impact of the lifting of import restrictions, strong rebound in tourism, and the gradual relaxing of monetary policy, according to the World Bank’s twice-a-year country update published on Tuesday.
Likewise, the multilateral donor forecasted that Nepal would see about 5 per cent economic growth in the coming FY 2024/25. “However, there are multiple risks to the outlook including an erratic monsoon, which could dampen agricultural growth; a renewed spike in commodity prices or continued food export bans by India which would raise prices; and higher inflation which could keep policy rates elevated, increase domestic debt servicing costs, and drag on growth,” said a WB statement.