Nepal - Assessment Letter for the World Bank
Policy Papers, May 29, 2015
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- Published: May 29, 2015
- Series: Policy Papers
Macroeconomic performance before the earthquakes
- Growth accelerated to 5.5 percent in 2013/14, thanks largely to a favorable monsoon.
- Inflation had been moderating but remained high at 7 percent (y/y) in March 2015.
- The fiscal position in 2013/14 (mid-July 2013 to mid-July 2014) was in surplus, driven by under-execution of spending amid solid revenue growth.
- The trend of budget under-execution continued through April 2015, indicating that a small fiscal surplus looked again likely in 2014/15.
Fiscal and public debt developments
- Public debt eased to 25 percent of GDP in 2013/14.
- Public debt remained on a declining path through the period covered.
External sector and reserves
- The current account surplus reached 4.6 percent of GDP in 2013/14, driven by rapidly growing remittances.
- Remittances reached a record-high 28 percent of GDP in 2013/14.
- Net of remittances, Nepal ran a current account deficit of 23.6 percent of GDP in 2013/14.
- International reserves rose to US$6.2 billion by March 2015, equal to 29 percent of GDP and covering almost eight months of prospective imports.
Short-term shock and outlook
- The earthquakes of April 25 and May 12 are expected to cause an initial slowdown in economic activity.
Source: Nepal - Assessment Letter for the World Bank, May 29, 2015.
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- Nepal—Assessment Letter for the World Bank, May 29, 2015