Kathmandu, July 26
The country’s economy is projected to grow at 6.02 per cent in the current fiscal year and 5.77 per cent in the next fiscal based on the current macroeconomic scenario, as per the Institute for Integrated Development Studies (IIDS), a research wing of Kathmandu University.
Releasing the Nepal Economic Outlook 2018-19 today, IIDS stated that the growth rate will moderate in the current fiscal while it is expected to decline in fiscal 2020-21.
The economic growth forecast of IIDS for this fiscal is lower than those made by World Bank (WB), Asian Development Bank (ADB) and International Monetary Fund (IMF).
The WB has projected Nepal’s economy to grow at 6.4 per cent in fiscal 2018-19 while ADB and IMF have both forecast a 6.3 per cent growth. For fiscal 2020-21 too, the GDP growth forecast of IIDS is lower compared to WB’s which has projected Nepal’s economy to grow at 6.5 per cent during the year. However, IMF has projected Nepal’s economy will grow at 4.5 per cent in fiscal 2020-21.
Meanwhile, the IIDS has projected inflation in the country to remain at 4.76 per cent in the ongoing fiscal year and 4.7 per cent in the next fiscal year. On the other hand, WB, ADB and IMF have projected inflation to stand at 4.7 per cent, 5.1 per cent and 6.5 per cent, respectively, in the ongoing fiscal year. In fiscal 2020-21, IMF and WB have projected inflation to stand at 6.2 per cent and five per cent, respectively.
Speaking at a panel discussion at the Nepal Economic Outlook 2018-19 event, former finance ministers emphasised on the need to focus on policy implementation, project execution, controlling corruption, effective governance and enhancing bureaucratic capacity to foster desirable economic and development growth.
“Rather than being populist, the government should focus on implementing policies, generating employment opportunities, establishing a culture of respect for labour, developing infrastructure and enhancing the capacity of the three tiers of the government so that the country can achieve competitive development and economic growth,” said former finance minister Ram Sharan Mahat.
Similarly, former finance minister Prakash Chandra Lohani, said that the government should primarily address the issue of corruption and maintain transparency in every government activity in a bid to develop the economy and the country. “For this, the government should immediately endorse the Transparency Law, which was drafted many years ago,” he said.
Likewise, former finance minister Surendra Pandey, said that efforts should be made to bring informal businesses and activities into the formal economy.
A version of this article appears in print on July 27, 2019 of The Himalayan Times.