Ailing economy worries Mahat

Kathmandu, May 2:

The newly-appointed Finance Minister, Dr Ram Sharan Mahat, today voiced serious concern over the country’s ‘deteriorating’ economy.

Dr Mahat told a group of journalists after he was sworn in that the liquidity crunch in the national treasury is a serious challenge for the new government.

He said an immediate and serious homework is a must for economic revival.

He stressed that economic and financial policies must focus on establishing sustained peace.

Governor of the Nepal Rastra Bank (NRB), Bijay Nath Bhattarai, talked about a bleak economic picture.

He has said that cash position in the national treasury stands at a mere Rs 1.85 billion at the close of April 28, which is a discouraging figure compared to about Rs 3 billion in the same period last year.

The frequent strikes have further hit the economy hard, Bhattarai said.

Bhattarai added that domestic borrowing has increased to Rs 7.09 billion compared to Rs 3.85 billion during the same period last year.

Talking about the increased foreign trade scenario, Bhattarai further said that trade deficit with India alone has increased by over Rs 16.53 billion recently, compared to Rs 5 billion during the same period last year.

Even inflation has increased by over 9 per cent currently, thanks to the hike in the prices of petroleum products and supply constraints created by strikes, the Governor said.

The finance minister said that as the government’s main agenda is restoring peace, the economic policies and programmes should be ‘reformulated’.

Dr Mahat had earlier resigned as finance minister in May 2002, following ‘differences’ with the then Prime Minister Sher Bahadur Deuba.