KATHMANDU, MAY 13
Nepal's economic mood has lately veered toward pessimism; grim headlines, anxious punditry, and a lingering sense of drift. But the nine-month macroeconomic report from Nepal Rastra Bank (NRB) tells a different story: One of quiet resilience and steady stabilisation.
Let's be clear - this isn't an economic boom, but it's not a crisis either.
Inflation? In check
While many countries wrestle with high prices, Nepal has kept year-on-year consumer price inflation (CPI) at a modest 3.39 per cent. That's no small feat in today's turbulent global climate. Stable prices help preserve purchasing power, sustain consumer confidence, and keep the central bank from having to slam on the brakes.
Trade is picking up
Surprisingly, exports jumped 65.2 per cent, partly due to a low base but also because of improved competitiveness in selected sectors. Imports rose 12.2 per cent, signalling a rebound in domestic production and consumption. This is a sign of normalisation, not distress.
Remittances still power the engine
Nepal's migrant workforce continues to play its vital role. Remittances grew 10 per cent in rupee terms (7.3 per cent in dollars), helping fuel household spending, narrow the trade gap, and bolster foreign exchange reserves. In a country where remittances are a lifeline, this is stabilising firepower.
External buffers are strong
The numbers are hard to ignore. Nepal posted a balance of payments surplus of Rs 346.23 billion. Foreign exchange reserves reached $17.63 billion, enough to cover more than a year's worth of imports. That's a solid cushion against global shocks and a confidence booster for investors.
A fiscal deficit, but not a red flag
Yes, spending (Rs 998.52 billion) continues to outpace revenue (Rs 831.40 billion), but the gap is neither surprising nor alarming for a developing economy. In fact, strong revenue mobilisation hints at improving tax compliance and administrative capability.
Credit growth? A mixed picture
Broad money supply rose 6.2 per cent, and private sector credit expanded 7.1 per cent. Deposits increased by 5.7 per cent. These are healthy, if modest, signals. But let's be honest; Nepal needs more credit flowing into productive sectors to create jobs and spur investment.
Narrative correction needed
The data don't support the doom-and-gloom narrative. Inflation is under control, trade is recovering, remittances are strong, and external finances are robust. If this is an economy in crisis, it's hiding it well.
That said, long-standing issues remain. Capital expenditure is sluggish. Private investment is tepid. Youth continue to leave the country in search of better opportunities. And policy instability still casts a shadow over long-term planning.
The priority now? Unlock private sector potential, boost credit to MSMEs, and accelerate public infrastructure projects. In short, shift from stabilization to growth.
Let's be realistic, not cynical
Nepal's economy isn't soaring but it's not sinking either. It's time the national conversation caught up with reality. The fundamentals are sounder than many think. What we need now is smart policy, steady leadership, and a renewed sense of confidence.
The author is the founder and CEO of Team Ventures, an alternative investment firm based in Kathmandu
