Nepal: Fourth Review Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Nepal
IMF Staff Country Reports, July 15, 2024
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Bibliographic details
- Published: July 15, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400282331.002
Overview and Context
- Publication date: July 15, 2024
- Focus: Nepal’s Fourth Review under the Extended Credit Facility (ECF) Arrangement.
- Program status: Nepal has made good progress with implementation of the program, despite a challenging political environment.
- Pages: 124
- Volume: 2024
- Issue: 225
- Series: Country Report No. 2024/225
- DOI: https://doi.org/10.5089/9798400282331.002
- Stock No: 1NPLEA2024001
- ISBN: 9798400282331
- ISSN: 1934-7685
- Subjects: Asset and liability management, Credit, Debt relief, External debt, Money, Public debt, Revenue administration
- Keywords: accommodative monetary policy stance, Asia and Pacific, Credit, Debt relief, ECF arrangement, ECF program implementation, Global, Nepali authorities, UML-NC coalition
Macroeconomic assessment and growth outlook
- Growth is below potential.
- Priority: Execute the planned increase in capital spending as envisaged in the FY24/25 budget to boost growth.
- Fiscal stance: Maintain fiscal discipline through domestic revenue mobilization and rationalization of current spending to preserve medium-term fiscal sustainability.
Monetary and financial sector policy
- Recommendation: Monetary policy should maintain the current cautious, data-driven approach to preserving price and external stability.
- Financial stability concern: Avoiding further boom-bust credit cycles is critical to establish a more stable, pro-growth equilibrium.
Structural reforms and inclusiveness
- Continued structural progress is needed to foster investment and more inclusive growth.
- Key structural priorities:
- Improving the business climate.
- Building human capital.
- Continuing to improve social safety nets.
- In particular: aim for full execution of the child grant budget, followed by an expansion of the program to all districts in Nepal.
Key policy recommendations (concise bullets)
- Execute planned capital spending increases in FY24/25 while upholding fiscal discipline.
- Mobilize domestic revenue and rationalize current spending to protect medium-term fiscal sustainability.
- Maintain a cautious, data-driven monetary policy to preserve price and external stability.
- Prevent boom-bust credit cycles to support a stable, pro-growth equilibrium.
- Advance structural reforms to improve the business climate and human capital.
- Ensure full execution of the child grant budget and expand the program to all districts.
International Monetary Fund. Nepal: Fourth Review Under the Extended Credit Facility Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Nepal. Country Report No. 2024/225, July 15, 2024.
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