Kathmandu, January 23
Nepal’s economy can grow by 5.5 per cent this fiscal, the International Monetary Fund says.
Normalisation of economic activity, good monsoon, accommodative monetary policy and rising government spending can help Nepal achieve 5.5 per cent growth in 2016/17, said Geert Almekinders, head of the IM”s 2017 Article IV Consultation Mission to Nepal.
The government’s growth target for this year stands at 6.5 per cent.
“Nepal’s economy is rebounding following a slowdown caused by the 2015 earthquakes and trade disruptions and supported by the government’s efforts to revitalise the reform agenda. The key challenge now is to put policies in place that will extend the cyclical recovery into a sustained period of high and inclusive growth,” added Alemkinders.
He said that India’s sudden withdrawal of high-denomination notes is expected to have limited impact on overall economic activity in Nepal, and the main risk to the outlook pertained to the failure of capital budget implementation.
According to the mission, the government is likely to undershoot its inflation target of 7.5, due to abnormal circumstances in the economy last year. Similarly, Nepal’s external position remains strong as its international reserves have reached a record high of $8.7 billion.
