In a comprehensive address marking the 69th anniversary of Nepal Rastra Bank (NRB), Governor Maha Prasad Adhikari provided an assessment of the country’s current economic condition, describing it as moderate. Despite challenges like low credit demand and economic slowdown, Adhikari highlighted positive signs in the external sector as a notable development during the year 2080 BS.
The governor commended the central bank’s efforts in maintaining fiscal stability, strengthening the payment system, and containing high inflation. Significantly, he expressed confidence that the inflation rate for consumer goods in the current fiscal year is expected to remain within a moderate cap of 6.5 percent.
However, Adhikari cautioned about potential risks stemming from the ongoing Russia-Ukraine conflict, conflicts in the Middle East, and export bans imposed by some countries on foodstuffs. These factors could lead to price fluctuations in essential commodities like food and fuel, posing challenges to the economy.
On a positive note, the NRB governor acknowledged the encouraging growth in remittance inflows, mirroring the trend from the previous fiscal year. He attributed the ample liquidity in the market and reduced interest rates as conducive factors for better economic activities.
Agriculture, a crucial sector for Nepal’s economy, is projected to have a satisfactory output in the current fiscal year, thanks to favorable weather conditions and timely supplies of fertilizers, according to Adhikari.
Additionally, the governor highlighted the production of 600 megawatts of power and progress in the tourism industry as potential drivers for an average economic growth rate.
Addressing the central bank’s ongoing efforts, Adhikari shared that the NRB is actively working on formulating vital laws and procedures for the management of monetary and fiscal sectors. This includes the drafting of crucial legislation such as the Lease Finance and Securitization acts.
Adhikari reaffirmed the NRB’s commitment to effective monetary sector management, underscoring the central bank’s pivotal role in the country’s overall economic development and fiscal stability.
As Nepal navigates through economic uncertainties, the governor’s assessment provides insights into the challenges and opportunities that lie ahead, emphasizing the need for prudent policies and proactive measures to sustain growth and stability.
