Parliamentary and provincial elections going to be held in Mangsir 2074 may be the main pushing factor behind the positive sentiment builders among consumers and investors alike. Recently passed Intergovernmental Fiscal Management Bill 2017, Natural Resources and Fiscal Commission Bill, 2017 and Employee Adjustment Bill, 2017 are expected to facilitate capital spending at local levels and growth in economic activities in the country.
As per the macroeconomic report of the country published by Nepal Rastra Bank for Shrawan-Bhadra 2074, NRB hopes that industrial sector will be enhanced due to availability of required infrastructures timely, supported by continuous flow of electricity after completion of major hydropower projects in upcoming days. The registration of hotel and restaurants as well as expansion of hotel and restaurants by the private sectors may play crucial role to give proper shape to the tourism industry. Moreover, remedial measures adopted by the government against flood and landslides helped for agriculture sector from huge losses.
Based on the data reported by 6 NRB offices, 76 branches of Rastriya Banijya Bank Limited, 49 branches of Nepal Bank Limited, 25 branches of Agricultural Development Bank Limited, 12 branches of Everest Bank Limited, 10 branches of Nepal Investment Bank Limited, 9 branches of Global IME Bank Limited, 8 branches of NIC Asia Bank Limited, 2 branches of Bank of Kathmandu Limited and 1 branch each from NMB Bank Limited and Century Commercial Bank Limited that conduct government transactions, and released reports from 79 District Treasury Controller Offices and payment centers, the followings are the major macroeconomic situations of Nepal for the first two months (Shrawan-Bhadra 2074) of the ongoing fiscal year 2074/75.
Inflation
Inflation has risen to 3.4% in Bhadra 2074 as compared to lowest inflation of 2.3% in Shrawan 2074. The overall hike in prices due to floods and landslides was the main reason behind the rise in inflation to 3.4%. However, such inflation is lower than the inflation of 7.9 percent recorded in the corresponding period of the previous year.
See
Nepal’s full inflation scenario in ShareSansar’s new economy section
Government Revenue & Expenditure
The Government of Nepal has expected to earn a revenue of Rs 730.05 billion and to spend Rs 1278.99 billion in the FY 2074/75.
At the end of Bhadra, 2074 the government revenue collection increased by 10.3 % to Rs 88.79 billion. Such revenue had increased by 51.6% to Rs 80.47 billion in the corresponding previous year. But the growth rate is below targeted.
On the other hand, the total government expenditure on a cash basis increased to Rs 72.38 billion. Such expenditure had increased just Rs 31.55 billion in the corresponding period of the previous year 2016/17.
The government had earned 12.16% revenue of its targeted revenue and spent only 5.65 % of the budgeted expenditure, till the end of Bhadra 2074.
See
Nepal’s Government full revenue and expenditure in ShareSansar’s new economy section
Capital Expenditure
These are the expenditure made on fixed assets. Capital expenditure is funds used to acquire physical assets to improve its value or increase its long-term productivity.
The government had targeted to spend Rs 335.17 billion as capital expenditure. At the end of Bhadra, 2074 only 0.46% of the budgeted capital expenditure of Rs 1.55 billion was made which seems to be utilized ineffectively and it notifies slow growth of development activities. This shows that developmental works are not going as per the target made by the government pushing the country’s backward as well.
See
Nepal’s Capital Expenditure in ShareSansar’s new Economy section
Remittance
Remittance is one of the major sources strengthening the Nepalese GDP since many years as money sent from abroad by Nepalese are comparatively higher than the income generated from production of goods in the country.
In the review year, Nepal’s workers’ remittance increased 0.7 % to Rs 115.55 billion. The growth in the previous year was 6.6%. But the amount of remittances has declined due to fall in number of Nepalese going abroad foreign employment by 7.2 %.
See Nepal’s
Remittance outlook in ShareSansar’s new Economy section
BFIs Deposit & Lending
Deposits at Banks and Financial Institutions (BFIs) increased by 2.4 percent in the review year compared to an increase of 1.2 percent in the previous year.
Credit to the private sector from BFIs increased 2.1 percent in the review year compared to a rise of 3.5 percent in the previous year. In the review year, private sector credit from commercial banks and development banks increased 1.8 percent and 4.8 percent respectively, while that of finance companies increased 1.3 percent.
See
Nepal’s BFIs Deposits & Lendings in Share Sansar’s new Economy section
Interest Rates
The weighted average 91-day Treasury Bill rate decreased to 0.48 percent in two month of 2074/75 from 2.05 percent a year ago. Likewise, the weighted average inter-bank transaction rate among commercial banks, which was 2.56 percent a year ago, decreased to 0.39 percent in the review month. The average base rate of commercial banks increased to 10.13%.
See
Nepal’s Interest rates in Sharesansar’s new Economy section
Budget Deficit / Surplus
In the review year, the Government of Nepal (GoN) was at a surplus of Rs 19.18 billion in its budget which was Rs 45.62 billion in the corresponding period of the FY 2073/74.
See
Nepal’s Budget Deficit / Surplus at Sharesansar’s new Economy section
