IMF Affirms Nepal's Investment-Friendly Energy Infrastructure Amidst Economic Challenges

A team from the International Monetary Fund (IMF), led by Mr. Tidiane Kinda, has concluded its visit to Nepal, shedding light on the nation's economic dynamics. The assessment, conducted from February 5-12, 2024, delved into recent macroeconomic developments and the progress of the IMF-supported program.

In the face of challenges, Nepal's energy infrastructure sector maintains its allure for investors, contributing to the country's overall economic resilience. The external sector has exhibited notable strength, buoyed by robust remittances, a surge in tourism, controlled imports, and reduced inflation. However, lingering issues such as weak domestic demand, significant outward migration, and sluggish credit growth, despite monetary relaxation, continue to pose challenges to near-term economic expansion.

In pursuit of sustainable growth, the IMF recommends augmenting revenue streams and expediting capital expenditure, strategies deemed crucial for Nepal's economic revitalization. Despite these challenges, the long-term economic outlook for Nepal remains positive, particularly with strategic investments in the energy infrastructure sector.

With the upcoming Investment Summit on the horizon, Nepal has a golden opportunity to showcase its economic potential globally. The IMF commends the nation's steadfast commitment to meeting program commitments, and the recent disbursement of Rs 7 billion under the extended credit facility signifies the ongoing collaboration for sustainable economic development.