Nepal: Staff Report for the 2001 Article IV Consultation

IMF Staff Country Reports, October 3, 2001

Source details

Date: October 3, 2001
Nepal showed satisfactory macroeconomic performance despite difficult political circumstances.
Executive Directors welcomed the comprehensive program of structural reforms aimed at poverty reduction and stressed the need for prudent macroeconomic policies.
The authorities' strategy to address the negative net worth of the two largest banks and to strengthen the financial sector was appreciated.
Directors encouraged the authorities to:
- maintain an open trade and investment regime,
- encourage access to world banks,
- implement the recommendations of the IMF's multisector statistics mission, and
- improve the macroeconomic database.

Fiscal and public finance:
- Subject: Budget planning and preparation; Expenditure; Public financial management (PFM).
Financial sector:
- Subject: Commercial banks; Financial institutions; Monetary base; Money.
- Noted issue: negative net worth of the two largest banks; strategy to address this was supported.
External sector:
- Subject: External debt.
Statistics and data:
- Recommendation to implement IMF multisector statistics mission findings and improve the macroeconomic database.
Miscellaneous subject tags included: alcohol restriction, central bank, CR, Global, government, IMF staff estimate, IMF surveillance overthe, ISCR, land reform, Monetary base, new land reform law, South Asia, staff appraisal.

Maintain an open trade and investment regime.
Encourage access to world banks.
Implement the recommendations of the IMF's multisector statistics mission.
Improve the macroeconomic database.
Maintain prudent macroeconomic policies alongside structural reforms targeted at poverty reduction.
Strengthen the financial sector and resolve negative net worth issues in major banks.