Kathmandu, Nepal: An International Monetary Fund (IMF)
staff team, led by Mr. Tidiane Kinda, conducted a staff visit to Kathmandu
during Feb 5-12, 2024, to discuss recent macroeconomic developments and the
implementation of the
Fund-supported program
.
At the conclusion of the visit, Mr. Kinda issued the following statement:
“Nepal’s external position continues to strengthen on the back of buoyant
remittances, increasing tourism activity, subdued imports, and inflation is
decreasing. Weak domestic demand, large outward migration, and low credit
growth despite monetary relaxation continue to weigh on near-term economic
growth. Enhancing domestic revenue mobilization and accelerating the
execution of capital expenditure will provide needed support to growth
while securing fiscal sustainability. Increased vigilance on banks’ asset
quality and stepped-up supervisory efforts are important to preserve
financial stability in view of growing non-performing loans.
“The medium-term economic outlook remains favorable, as strategic
investments in infrastructure, especially in the energy sector, are
expected to support potential growth. The upcoming Investment Summit
presents an opportunity to showcase Nepal’s
economic potential. Timely reforms to durably improve the investment
climate will help take full advantage of the Summit and pave the way to
stronger growth in the future.
“The authorities’ ongoing efforts in meeting key commitments under the
Fund-supported program, with the support of IMF’s technical assistance, are
welcome. Performance under the program will be formally assessed in the
context of the fourth review of the Extended Credit Facility, which is
expected to take place in the middle of the year.
“The IMF team is grateful to the Nepali authorities for their hospitality
and constructive discussions. Ms. Gulde-Wolf, Deputy Director in the IMF’s
Asia and Pacific Department, attended key
meetings. The IMF team held meetings with the Honorable Minister of Finance
Dr. Prakash Sharan Mahat, the Nepal Rastra Bank Governor Mr. Maha Prasad
Adhikari, the National Planning Commission Vice-Chairman Dr. Min Bahadur
Shrestha, and other senior government and central bank officials. The IMF
team also met with representatives from the private sector and development
partners.”
