Weekly Economic Updates (26th July 2024–2nd August 2024)

1. Nepal’s Public Debt Soars Amid Slow Revenue Growth and High Spending: Nepal’s public debt reached NPR 2.43 trillion (42.65% of GDP) in FY 2023/24, raising concerns over unsustainable debt and unproductive investments. The government aims to address an FY 2024/25 budget shortfall through loans and set revenue targets at NPR 1.2 trillion.

(Source: https://myrepublica.nagariknetwork.com/news/country-s-public-debt-doubles-in-just-five-years/)

2. MCA-Nepal Contracts Indian Firm for USD 38.89 million 400KV Substation: MCA-Nepal contracted India’s Techno Electric for a USD 38.89 million substation in Damauli, completing all three 400KV substations under the MCC Nepal Compact, aimed at enhancing Nepal’s electricity distribution and economic growth.

(Source: https://theannapurnaexpress.com/story/49939/)

3. NRB’s Foreign Employment Bonds Fail to Attract Migrant Workers: Nepal Rastra Bank’s foreign employment saving bonds (FESB) saw only 4.9% sales due to lack of information and cumbersome processes. The NRB suggests policy reforms, better publicity, and a paperless system to boost uptake.

(Source: https://myrepublica.nagariknetwork.com/news/foreign-employment-bonds-performance-pathetic-in-13-years-since-its-inception/ )

4. Bhaktapur Sees 46% Surge in Tourist Arrivals: Bhaktapur’s tourist arrivals rose by 46.49% to 245,593 in FY 2023/24, generating NPR 274.45 million in tourism fees, underscoring its growing appeal and economic contribution.

(Source: https://myrepublica.nagariknetwork.com/news/tourists-visiting-bhaktapur-increase-by-78-000-in-fy-2023-24/ )

5. NRB Imposes Stricter Regulations on Microfinance Institutions: Nepal Rastra Bank has mandated MFIs to reduce service fees, eliminate surcharges, and distinguish between willful and non-willful defaulters while increasing loan limits and allowing collateral-free loans up to NPR 25,000.

(Source: https://myrepublica.nagariknetwork.com/news/nrb-reduces-service-fee-limit-of-microfinance-to-1-3-percent-from-1-5-percent-while-issuing-loans-to-borrowers/ )

6. Government to collect internal debt of NPR 10 billion: Nepal is issuing an 11-year bond to raise NPR 10 billion with interest rates set by auction, maturing on August 2, 2035, and offering semi-annual payments.

(Source: https://myrepublica.nagariknetwork.com/news/govt-to-collect-internal-debt-of-rs-10-billion-issues-11-year-development-bond/ )

7. Nepal Rastra Bank Introduces Swap Transactions to Manage Foreign Exchange Risk: Nepal Rastra Bank’s new regulation allows banks to use ‘Buy-Sell US Dollar/Nepali Rupee Swaps’ to manage foreign exchange risks, with transactions ranging from USD 1 million to USD 10 million.

(Source: https://www.onlinekhabar.com/2024/07/1516001 )

8. Nepal Rastra Bank Sets New Standards for Microfinance Staff and Governance: Nepal Rastra Bank’s new standards for microfinance staff include background checks, required training, and regular evaluations, with annual governance reports and updated director details.

(Source: https://www.onlinekhabar.com/2024/07/1515964 )

9. Tripartite Electricity Trade Agreement Between Nepal, India, and Bangladesh Postponed: The tripartite electricity trade agreement between Nepal, India, and Bangladesh has been postponed due to protests in Bangladesh. Nepal was set to export 40 MW of electricity daily to Bangladesh.

(Source: https://myrepublica.nagariknetwork.com/news/cross-border-electricity-trade-agreement-among-nepal-india-and-bangladesh-halted/ )

10. Nepal Rastra Bank Unveils Flexible Monetary Policy for FY 2081/82: Nepal Rastra Bank’s new monetary policy for FY 2081/82 targets a 12% increase in private sector credit and removes the NPR 200 million cap on share mortgage loans. The NPR 150 million limit on personal loans remains unchanged, which reflects a balance between economic support and stability.

(Source: https://www.onlinekhabar.com/2024/07/1515032 )