Weekly Economic Update (May 12, 2023–May 18, 2023)
1. Lower GDP growth forecasted for all provinces — The National Statistics Office (NSO) has forecasted lower economic growth for all the provinces for FY 2022/23, with Bagmati Province having the lowest growth projection at 1.4%. According to NSO, Gandaki Province will have the highest economic growth among the seven provinces at 3.3%. (Source- https://theannapurnaexpress.com/news/nso-forecasts-lower-gdp-growth-of-provinces-for-this-year-42508)
2. Only 33% of the annual capital budget spent — The government has only spent 33.04% or NPR 125.68 billion of the budgeted NPR 380.38 billion for capital expenditures. In terms of overall budget spending, the government has achieved 58.41% of the targeted NPR 1.793 trillion. (Source- https://english.onlinekhabar.com/poor-development-budget-spent-may-023.html)
3. NRB lowers bank rate by 1% — Nepal Rastra Bank (NRB) has lowered the bank rate by 1% to 7.5% to reduce interest rates and increase the money supply. While it has been welcomed by various apex bodies of industries, it has also raised concerns about increasing the already high inflation. (Source- https://kathmandupost.com/money/2023/05/12/nepal-s-central-bank-cuts-rate-as-recession-bites)
4. Insurance companies halt agricultural insurance — Nepal Insurers’ Association has announced the suspension of agricultural and livestock insurance and paying its claims from May 21 onwards as the government has not yet paid the subsidy amount. The government has failed to make payments that now amount to NPR 2.94 billion. (Source- https://theannapurnaexpress.com/news/insurance-companies-halt-agri-insurance-42520)
5. FDI commitment decreases by 14% in current FY — In the first ten months of FY 2022/23, Nepal received foreign direct investment (FDI) commitments of NPR 29.74 billion. It is a 14% decrease compared to the commitments in the same period of FY 2021/22. (Source- https://myrepublica.nagariknetwork.com/news/fdi-commitment-down-by-14-percent-in-the-first-10-months-of-the-current-fy/)
6. Bangladesh to purchase 40MW of electricity from Nepal– Bangladesh agreed to purchase 40 megawatts (MW) of electricity from Nepal. The two countries will be holding a tripartite meeting with India as the electricity would need to go through India. Bangladesh and Nepal will also be jointly developing the 683 MW Sunkoshi-3 Hydropower Project. (Source- https://myrepublica.nagariknetwork.com/news/bangladesh-agrees-to-buy-40-mw-of-electricity-from-nepal/)
7. Telecom Authority to implement MDMS — Nepal Telecommunication Authority has announced the implementation of the Mobile Device Management System (MDMS) starting from May 15. The MDMS system will be mandatory for all mobile sets used in Nepal. (Source- https://kathmandupost.com/money/2023/05/14/telecom-regulator-implements-mobile-device-management-to-check-grey-market)
8. DoTM releases new reduced fares– The Department of Transport Management (DoTM) has reduced the fares of long-distance vehicles by 3.20% for passenger vehicles, 4.19% for cargo vehicles operating on mountain roads, and 4.65% for cargo vehicles operating on Terai roads. (Source- https://myrepublica.nagariknetwork.com/news/dotm-reduces-transport-fares-for-long-distance-passengers-with-new-fares/)
9. IFC approves USD 55 million loan to Siddhartha Bank — The International Finance Corporation (IFC) has approved a USD 5 million loan to Siddhartha Bank, making it the biggest loan amount IFC has provided to a Nepali bank. The amount aims to increase access to finance for small businesses and to foster climate finance in Nepal. (Source- https://myrepublica.nagariknetwork.com/news/ifc-approves-loan-of-us-55-million-to-siddhartha-bank/)
10. ADB approves loan of USD 300 million — Asian Development Bank (ADB) has approved a loan of USD 300 million to improve the connectivity of the Kakarbhitta–Laukahi road in Nepal to international trade routes. At least 95 km of road will be upgraded. (Source- https://myrepublica.nagariknetwork.com/news/adb-approves-300-million-loan-to-improve-road-connectivity-trade-in-nepal-1/)
