Kathmandu, September 24
An International Monetary Fund (IMF) staff team, led by Sarwat Jahan, conducted a staff visit to Kathmandu from September 11-22, 2024, to discuss recent macroeconomic developments and the implementation of the Extended Credit Facility (ECF)-supported program.
Following the conclusion of the visit, Jahan issued a statement which reads, “Nepal’s economy is showing early signs of recovery. Incoming high-frequency data shows import growth is entering into positive territory, tax collections are improving, and public investment is picking up. Credit growth is recovering while remaining appropriately below nominal GDP growth.”
According to the statement, Inflation continued to decelerate to around 3.6 per cent by mid-July, partially reflecting favourable commodity prices and weak demand. International reserves continued to rise, underpinned by robust remittances, recovering tourism, and still subdued imports.
The statement suggests that accelerating the reform momentum is critical to putting the economy on a path towards sustainable, strong, and inclusive economic growth. This will require enhancing public investment execution, further strengthening of domestic revenue mobilization, and prompt disbursement of Child Grants.
As per the statement, the recent amendments to the Anti-Money Laundering Act are a welcome step. Amending the Nepal Rastra Bank (NRB) Act, completing NRB’s external audit and increasing public enterprise transparency will enhance governance and accountability. The Investment Facilitation Act will bolster Nepal’s investment climate.
The IMF team held meetings with the Deputy Prime Minister and Minister of Finance Bishnu Prasad Paudel, the Nepal Rastra Bank Governor Maha Prasad Adhikari, the National Planning Commission Vice-Chairman Shiva Raj Adhikari, and other senior government and central bank officials. The IMF team also met with representatives from the private sector and development partners. Duttagupta, Deputy Director of the IMF’s Asia and Pacific Department, attended key meetings.
