Finance Minister Acknowledges Economic Challenges Despite Positive Indicators

Kathmandu. Finance Minister Rameswor Khanal stated that although improvements are visible in the country's macroeconomic indicators, significant challenges still remain for the economy. Addressing the 36th anniversary ceremony of the Citizen Investment Trust on Wednesday, he clarified that external sector pressure and sluggish domestic investment have not yet made the economy risk-free.

He pointed out the large volume of idle capital accumulated in banks failing to be invested in productive sectors as the main problem of the current economy. Finance Minister Khanal mentioned that there is a risk that Nepal's supply chain could be disrupted and the price of imported goods could rise due to the recent crisis in the Middle East and Gulf countries. He urged all stakeholders to remain vigilant, warning that this could increase the cost of industrial production and negatively affect the overall economy.

He also emphasized the need to make some economic decisions rapidly in such a situation. Noting that the country is on the verge of a government change, he expressed confidence that the powerful majority government to be formed next will accelerate the economy while facing external challenges.

Discussing the indicators, the Finance Minister informed that Nepal has a surplus in its balance of payments and current account, foreign exchange reserves are good, and the inflation rate is low. According to him, the government's revenue growth rate has reached at least four percent, and revenue collection is approximately 83 percent of the target.

Despite these signs of improvement, he stated that this is not enough for the economy to become fully dynamic. Although the improvement in revenue collection provides some relief, the situation cannot be considered secure until investor confidence increases.

Finance Minister Khanal clarified that statistical improvements alone will not bring satisfaction until sufficient employment is created in the country and idle capital is mobilized into real production sectors. He argued that the main task ahead should be creating an environment where capital is easily accessible to investors and maintaining their high morale. Navigating past external crises and the contraction of domestic investment appears to be a tough test for the new government.