Weekly Economic Updates (30th August 2024–5th September 2024)
- Analysis of Foreign Direct Investment in Nepal: FY 2079/080
The Nepal Rastra Bank’s survey report for FY 2079/080 reveals an 11.8% increase in Foreign Direct Investment (FDI), totaling NPR 295.5 billion. India leads with 35% of FDI, followed by China (12%) and Ireland (7.7%). FDI is concentrated in the industrial sector (59.7%), particularly hydropower and manufacturing.
2. Nepal’s public debt liability increased by NPR 41.11 billion in a month
Nepal’s liability to pay public debt increased by NPR 41.11 billion last month, while the country’s total debt liability reached NPR 2.472 trillion. The government received a total loan of NPR 43.59 billion in one month between mid-July and mid-August. Of the amount, NPR 40 billion was raised from domestic borrowing and the remaining NPR 3.59 billion was taken as an external loan.
3. NRB to mop NPR 40 billion from the banking system for liquidity management
Nepal Rastra Bank (NRB) is going to mop an additional amount of NPR 40 billion from the banking system for liquidity management. The NRB is going to mop NPR 40 billion for 21 days through a bidding instrument. Banks and financial institutions are required to submit proposals by 3 PM on September 4. Meanwhile, NPR 121 billion mopped earlier by the central bank is yet to mature.
4. Transport Office in Birgunj collects NPR 1.5 billion in revenue
The Transport Management Office, Birgunj, collected more than NPR 1.5 billion in revenue in the last Fiscal Year (FY) 2023/24. Compared to the previous FY 2022/23, the revenue collection upped by NPR 171.9 million. Chief of Transport Management Office, Birgunj, Kamal Raj Gautam, informed that last year’s revenue collection was encouraging.
5. Tourist Arrivals in Nepal Reach 720,334 in Eight Months of 2024
In the first eight months of 2024, Nepal welcomed 720,334 tourists, with 72,719 arriving in August alone, according to the Nepal Tourism Board. March saw the highest number of arrivals, with 128,167 tourists, while July had the lowest at 64,599. Although August 2024’s figures were 8.29% higher than the previous year, they were lower than in 2019.
6. Economy limping as low consumer confidence bites
Despite several positive indicators, the country’s overall economy is still in a “slowdown” mode. “We have to admit these facts,” said Finance Minister Bishnu Prasad Paudel. “There is no demand in the market. Consumer confidence is low. Investors are hesitant to invest. There is no proper utilization of liquidity,” he said.
(Source: https://kathmandupost.com/money/2024/09/02/economy-limping-as-low-consumer-confidence-bites)
7. Financial Struggles of Nepal Airlines Corporation
Nepal Airlines Corporation’s debt has surged to NPR 51.26 billion due to its inability to expand business operations, contrasting with the profitability of private airlines. The debt has escalated due to issues such as non-operational aircraft purchased from China, repeated grounding of planes, and weak managerial leadership.
(Source: https://nagariknews.nagariknetwork.com/economy/1447370-1725325017.html)
8. Nepal’s trade via the northern border resumes after 2 weeks
The cargo container movement from China, which had been halted at Nyalam and Khasa for the past two weeks due to the construction of a tunnel in the region, resumed on September 2. Dayananda KC, the Tatopani Customs chief, said that the cargo shipment was halted for a few days due to the construction of a tunnel. The goods, mainly readymade garments and fruits were stuck in the Nyalam and Khasa towns for 15 days.
(Source: https://kathmandupost.com/money/2024/09/04/nepal-s-trade-via-northern-border-resumes-after-2-weeks)
9. Cooperatives Minister Accuses Protesters of Exploiting Interest Rates for Profit
Minister for Land Management, Cooperatives, and Poverty Alleviation, Balram Adhikari, has accused protesters of exploiting low-interest bank loans to earn higher returns from cooperatives. Speaking at a Cooperative Journalists’ event, he claimed that many agitators take cheap bank loans and deposit them in cooperatives for profit. The Minister emphasized the need for gradual reforms and noted that small-scale depositors are the real victims of the ongoing cooperative crisis.
(Source: https://www.onlinekhabar.com/2024/09/1534493)
10. The taskforce suggests govt enforce corrective measures to regulate microfinance institutions
A task force formed by the government to study the problems in the microfinance institutions (MFIs) has mandated that the projects to be funded by MFIs be insured while receiving loans from these financial institutions on September 5. The Ministry of Finance (MoF) five months ago formed a seven-member taskforce to identify problems surfaced in the microfinance sector and recommend appropriate solution measures.
