May 25, 2022, Wednesday
Nepal 1:37:26 pm

Nepal economy heading towards grave crisis, warn three ex-Finance Ministers

The Nepal Weekly
April 12, 2022

Main opposition party – CPN-UML – has claimed that the country’s economy will deteriorate further if effective measures were not adopted immediately.

Three former finance ministers belonging to the main opposition party CPN-UML on Sunday made public a 12-point joint statement on the latest economic scenario of the country.

Organising a press meet on present economic issues, former finance ministers – Bishnu Paudel, Surendra Pandey and Dr. Yubaraj Khatiwada – said that the country’s economy was heading towards crisis and it should be brought on the right track through positive interference.

“The country’s economy is under the crisis and is moving towards a more critical situation,” they pointed out. Positive intervention is a must to save the country’s economy from further deterioration,” said CPN-UML vice chairman and former finance minister Poudel.

He said that economists, journalists and other concerned authorities should exert pressure on the government from their sides to bring the economy on the right track as the present government focussed only on protecting coalition government rather than safeguarding the national economy.

He claimed that the economic situation of the country was better when the then Prime Minister KP Sharma Oli left the government, but it started showing negative indicators after the formation of the present coalition government led by Sher Bahadur Deuba.

“Economic indicators such as inflation, foreign currency reserves, trade deficit and balance of payments are in worrisome condition. But the government has not paid any attention toward improving the situation,” he claimed.

Talking about the suspension of the Governor of Nepal Rastra Bank, the central bank of Nepal Maha Prasad Adhikari, Poudel said that “the action against the governor was objectionable and reprehensible.” He urged the government to immediately rectify the suspension decision.

Former Finance Minister and another vice-chairman of CPN-UML Pandey said that inflation was likely to hit double-digit this year as the price of all products is rising.

“With the decline in agricultural production, lack of additional investment capacity of banks, low morale of the private sector and declining development expenditure of the government, the state will not be able to increase capital expenditure,” pointed out Pandey adding this will also adversely affect employment.

He said that there would be further pressure on foreign currency reserves as imports are increasing despite the decline in growth of remittance inflow.

“Income from tourism – a major source of foreign currency, will not increase as the war between Russia and Ukraine would affect foreign tourist arrivals. So, it is urgent to take initiatives to strengthen foreign currency reserves by controlling imports,” Pandey pointed out. Former Finance Minister and former governor Dr. Khatiwada said that the country’s economy was in a critical condition. “External sector imbalance is growing exerting pressure on foreign currency reserves,” he said. The government should change course to bring the economy on track,” he added.

Khatiwada said that there is no money in the bank to invest due to faulty policies of the government. “Lack of money in bank to invest is because of unacceptable activities and wrongdoings of the government.” “Prices of food items have sky rocketed. Rising prices of petroleum products have made life difficult. Recurrent expenditure is expected to increase by 8 per cent; this is a wake-up call for the economy,” he warned.