Kathmandu, March 7
Nepal’s Ministry of Finance has lowered the country’s growth projections for the current fiscal year as the government said it can’t spend Rs 79 billion of the Rs 127 billion it promised to spend this year.
The government had earlier projected the economy to grow by 7.2 per cent. However, it has now lowered the projection, mid-way through the current fiscal, to 6 per cent. Presenting the mid-term review of this year’s budget, Finance Minister Yubraj Khatiwada said that growth will be limited to 6 per cent. Last year, the figure had stood at a record 6.9 per cent.
Khatiwada said that the government expects to limit inflation to 5 per cent. During the budget speech, the government had pledged to contain inflation within 7 per cent. The Finance Minister said that during the first six months of the current fiscal, remittances inflow to Nepal had declined by 0.5 per cent compared to the same period last year. Similarly, the amount the country spent on imports has increased by 13.4 per cent compared to the same period last year.
He said that the BoP is negative by Rs 6.6 billion and the current account deficit has climbed to Rs 75.71. The country’s foreign reserve is now worth Rs 10.81 billion. The minister said the government, as of Tuesday, had spent only 38 per cent of its budget. Only 23 per cent of the money set aside as capital expenditure has been spent. This took a toll on the growth rate.
Meanwhile, NRB Governor Chiranjibi Nepal says a decline in paddy production this year will also affect the growth rate.
