Weekly Economic Update (26 May 2022 to 2nd June 2022)
3 min readJun 2, 2022
- NATTA and Philippines Embassy to sign MoU — During the International Mountaineering Tourism Day, Nepal Association of Tours and Travel Agents (NATTA) and the Embassy of the Republic of Philippines signed a MoU to cooperate on several sectors including promotion of tourism, and growth and development of tourism. (Source — https://myrepublica.nagariknetwork.com/news/natta-and-embassy-of-philippines-ink-agreement-for-tourism-promotion/)
- Government announces new budget for FY 2022–23- Finance Minister Janardan Sharma presented a budget of NPR 1.79 trillion. Of the total budget, NPR 753.40 billion has been allocated as recurrent expenditure and NPR 380.38 billion as capital expenditure. (Source- https://kathmandupost.com/money/2022/05/30/a-rs1-79-trillion-budget-with-programmes-aimed-at-polls-and-no-clarity-on-resources)
- The budget addresses reopening of the Hetauda garment factory- The budget announcement of FY 2022–23 claimed that a Hetauda garment factory that was closed for two decades would reopen again. The resumption of operations indicates the government’s willingness to revive its stagnant industries in Nepal. (Source- https://myrepublica.nagariknetwork.com/news/hetauda-people-happy-over-budget-announcement-to-resume-garments-factory/)
- Economy expected to increase by 5.8% following decrease in COVID-19 cases — The prospective increase of 5.8% is a result of relaxed pandemic restrictions, which has allowed the economy and social life to return to normal according to the Finance Minister, Janardan Sharma. The estimate was lower than the 7% growth projected for the current fiscal year. (Source- https://www.reuters.com/markets/asia/nepal-expects-58-growth-covid-19-cases-fall-minister-2022-05-29/)
- The Central Bank indicates a tighter monetary policy — Due to inflationary pressures and depletion of foreign reserves in backing sectors, the central bank claims monetary policy might need to be tightened especially with an emphasis on increasing the flow of financial instruments to the productive sector, SMEs to promote domestic production and exports. (Source- https://thehimalayantimes.com/business/nrb-hints-at-tighter-monetary-policy)
- Decrease in FDI Threshold — Nepali government reduces the foreign investment threshold by 60% from NPR 50 million to 20 million to attract more FDI. It also created provisions to reduce approval barriers for foreign companies who want to invest more than NPR 100 million in Nepal. (Source- https://myrepublica.nagariknetwork.com/news/govt-reduces-minimum-threshold-for-fdi-injection-to-rs-20-million-from-rs-50-million/?categoryId=81)
- House Panel asks government to eliminate legal hurdles to Nijgadh Airport — The House wants to resume construction of the airport after it was halted by the Supreme Court. It claims the airport promotes national interests and strengthens the economy. The budget released for the next fiscal year demonstrates plan to resume construction. (Source- https://nepalnews.com/s/nation/house-committee-directs-government-to-remove-legal-hurdles-for-nijgadh-airport)
- Reduced tax on petroleum products — The government has decided to lower infrastructure tax on petroleum products with the aim to provide relief to consumers. The infrastructure tax and customs duty will be reduced by NPR 5 per liter. (Source- https://myrepublica.nagariknetwork.com/news/govt-decides-to-reduce-tax-on-petroleum-products/)
- The government increases the duty price on gold jewelry- Under the revised rule, individuals importing up to 50 grams of jewellery don’t need to pay customs duty. Any amount between 50–100 grams will be charged NPR 10,000 per 10 grams, NPR 2500 increase from the previous amount. Jewelries weighting above 100 grams will be charged NPR 12,000 per 10 grams. (Source- https://myrepublica.nagariknetwork.com/news/govt-raises-duty-on-gold-jewelries-imported-by-individuals/)
- 41 Kathmandu based co-operatives face embezzlement allegations- The Department of Cooperatives received complaints from 1,700 cooperative members who have demanded the recovery of the embezzled NPR 815.36 million. Three multipurpose cooperatives and several savings and credit cooperatives have been accused. (Source- https://myrepublica.nagariknetwork.com/news/41-kathmandu-based-cooperatives-accused-of-embezzling-rs-815-36-million-of-their-members/)
