Experts warn of economic slump, urge Govt. for immediate measures

December 17, Kathmandu: No sooner had the COVID-19-dented national economy been heading towards recovery, it has started witnessing serious problems in Nepal.

Reasoning this, economists have suggested the government that immediately take measures to address the problems.

They asked the government to adopt preventive measures to save the country’s economy from crisis, arguing that there was a liquidity crunch in the banking and financial sector, meagre capital expenditure, and an increasing balance of payment.

The balance of payment in the last four months is in the loss by Rs 1.51 billion, according to Nepal Rastra Bank. The foreign currency reserve is also in decline.

In recent months, remittance also declined. The development activities have not gained pace. The bank and financial sectors are not able to extend loans, for the deposit are not increased.

The import of luxury goods has impacted foreign currency. Economist Dr Chandramani Adhikari viewed, “Country’s economy is in imminent shambles. The negative indicators on BoP, foreign currency reserve has affected much.”

He suggested the government increase foreign currency reserve with the remittance, export of goods and services, priority on foreign investment.

Another economist Dr Dilliraj Khanal viewed, “Why is there a stagnant production while bank investment has upped? Not only the slump in government spending, current expenditure, and remittance but also the price hike have afflicted the country.”

Former governor of Nepal Rastra Bank and economist Dipendra Bahadur Chhetri stressed on banning import of some luxury items. He argued the capital expenditure failed to increase due to managerial weakness.

The current problem was raised not only because of the political system but also of the budget system, he added.

Chhetri further said the government had not a clear trade policy. Moreover, economist Poshraj Pande said the economy seemed feeble before political activities. At a time when remittance was contributing hugely to Nepal’s economy, it has now become barrier on development and expansion of economy.