KATHMANDU, Sept 26: Nepal’s economy is anticipated to grow by 5.5% (at basic prices) in fiscal year (FY) 2019, down from 5.9% a year earlier says the latest Asian Development Bank (ADB) Nepal Macroeconomic Update.

“The growth forecast represents a continued trend reversal but is substantially higher than the average rate of 4.3% in the last 10years (FY2009-FY2018),” the statement reads quoting ADB’s Principal Economist for Nepal. “Growth will be supported by expectations of greater political stability following the 2017 elections, normal monsoon, and efforts to accelerate implementation of mega infrastructure projects”, the statement added.

The limited capacity at sub-national levels and challenges to smooth implementation of federalism may pose risks to growth. According to the update, some of the major issues affecting the smooth implementation of fiscal federalism are slow to progress in requisite legislation and deployment of staff, the need for further clarification of mandates and responsibilities of the three tiers of government, and inconsistencies in revenue mobilization regarding fees and taxes at local levels.

The agriculture sector will likely grow from 2.8% in FY2018 to 3.5% in FY2019, on the back of an anticipated bumper harvest supported by a good monsoon. Industry sector is expected to expand by 7.2% in FY2019 buoyed by improved electricity supply. And the services sector will likely grow by 6.1% in FY2019 with the expansion of wholesale and retail trade, financial intermediation and travel and tourism subsectors.

The update says inflation is projected to rise to 6.0% in FY2019 from 4.2% in FY2018, partly reflecting higher inflation expected in India, a modest rise in oil prices and higher government expenditures under the new federal structure.

Though revenue collection of Nepalese Rupees731.4 billion (24.3% of GDP) slightly exceeded the budget target in FY2018, the fiscal deficit widened to 6.7% of GDP with the rise in government expenditures compared to the previous year. While capital expenditures increased by 28.0% in FY2018 with the execution rate at 79.7%, the hasty nature of spending has continued undermining the quality of capital projects, says the update.

Nepal increasingly faces the risk of external sector instability due to a rising trade and current account deficit. The current account deficit of $2.4 billion (8.2% of GDP) in FY2018 is significantly higher than the deficit of $95.7 million, or 0.4% of GDP, a year earlier. The merchandise trade deficit increased on the higher import of construction materials and capital goods in FY2018. While remittance has shown a healthy growth, a substantial rise in the near future is unlikely to offset the rise in the trade deficit, leading to further widening of the current account gap.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in co-financing.

Source: Republica

Corporate News

Age limit set for CEOs, directors at BFIs

KATHMANDU: Nepal Rastra Bank has set an age bar for board of directors and chief executive officers of banks and financial institutions (BFIS).

Read more ...

Sebon unveils policies and programs for FY 2019/20

KATHMANDU, July 16: The Securities Board of Nepal (Sebon) has unveiled a 72-point Policy and Program for Fiscal Year 2019/20 for the development of the securities and commodities exchange market.

Read more ...

NRB seeks commitment from commercial banks for mergers and acquisitions

Kathmandu, June 27-Nepal Rastra Bank today summoned chairpersons and chief executive officers of all 28 commercial banks in operation to discuss possible mergers and acquisitions in the future.

Read more ...

Remittance up by 20 %

KATHMANDU, June 19: Despite the declining number of people leaving for foreign jobs, the remittance into the country has increased by 20 percent, according to Nepal Rastra Bank report.

Read more ...
Symbol % Change Last Price Turnover
SABSL 5.9603 320.0 12,440.0
CLBSL 5.4217 525.0 21,717.0
DHPL 5.2632 60.0 40,238.0
RHPC 4.7619 88.0 33,924.0
SLBSL 3.4965 740.0 3,900,010.0
Symbol % Change Last Price Turnover
NIBSF1 -10.0000 9.0 171,550.0
SFFIL -4.7445 261.0 179,651.0
BBC -3.6750 1,494.0 61,280.0
NICL -3.2468 298.0 850,993.0
EIC -2.7356 320.0 1,005,008.0
Symbol % Change Last Price Turnover
NICA 0.0000 454.0 19,140,811.0
PRVU -1.4815 266.0 16,677,551.0
ADBL -0.2331 428.0 12,073,166.0
DBBLP 0.0000 105.0 9,862,350.0
NBL 0.0000 325.0 8,787,746.0