Experts warn of economic slump, urge government to take immediate action
Bank of Nepal Rastra (file photo)
KATMANDU: Hardly had the national economy shaken by COVID-19 found its way to recovery when it experienced serious problems in Nepal.
Because of this, economists have suggested that the government take immediate action to address the issues.
They called on the government to adopt preventive measures to save the country’s economy from the crisis, arguing that there was a shortage of liquidity in the banking and financial sector, low capital spending and a growing balance of payments. .
The balance of payments over the past four months is in loss of Rs 1.51 billion, according to the Nepal Rastra Bank.
The foreign exchange reserve is also declining. In recent months, remittances have also declined. Development activities have not progressed. The banking and financial sectors are unable to provide loans because the deposit is not increased. The import of luxury goods has had an impact on foreign currencies.
Economist Dr Chandramani Adhikari said: “The country’s economy is in imminent crumbling. The negative indicators on the BoP and the foreign exchange reserve affected a lot. He suggested the government to increase foreign exchange reserves with remittances, export of goods and services, prioritizing foreign investment.
Another economist, Dr Dilliraj Khanal, said: “Why is there stagnant production while bank investment has increased? Not only falling public spending, current spending and remittances, but also rising prices have plagued the country. “
The former governor of Nepal Rastra Bank and economist Dipendra Bahadur Chhetri insisted on the ban on imports of certain luxury items. He argued that capital spending had not increased due to weak management. The current issue has arisen not only because of the political system but also the budget system, he added. Chhetri added that the government does not have a clear trade policy.
Additionally, economist Poshraj Pande said the economy looked weak ahead of political activities. At a time when remittances contributed immensely to the Nepalese economy, they have now become an obstacle to the development and expansion of the economy.