Deputy Prime Minister and Minister for Finance Bishnu Paudel said Tuesday (September 3) that the government wants to achieve economic growth by carefully evaluating loans and investments in result-oriented projects.
Such projects, according to the minister, will be selected through a thorough cost-benefit assessment after ensuring the management of required funds.
Paudel made the remark during a meeting with Teresa Daban Sanchez, the International Monetary Fund's Resident Representative for Nepal.
Sanchez paid a courtesy call on Paudel to discuss macroeconomic and financial sector stability and the ongoing extended credit facility (ECF) program.
Paudel assured Sanchez that the government was committed to following the advice given by the IMF during the fourth review of its ECF for Nepal.
Earlier this year in July, the Executive Board of IMF granted Nepal Special Drawing Rights (SDF) of 31.4 million (about $ 41.3 million) under the four year-ECF upon completing the fourth review.
The global financial agency has so far disbursed a total of $247.7 million under the ECF. The IMF Executive Board had approved the ECF arrangement for Nepal on January 12, 2022 for SDR 282.42 million or about US$ 371.6 million).
Paudel, during Tuesday’s meeting, assured the IMF representative of cooperation with the global financial agency for the fifth review, according to the finance minister’s secretariat.
The IMF representative cited ample potential in Nepal’s hydropower and tourism sectors, advising that increasing capital expenditure in result-oriented areas will help grow the size of Nepal’s economy.
The government of Nepal has always failed to spend the allocated budget for capital expenditure.
Expenditures under the capital heading was Rs 191.7 billion, representing 63.47% of the allocated budget of Rs 302 billion in the last fiscal year.
Despite revising the budget twice, the government failed to meet its revenue and expenditure goals. While the revenue collection stood at 74.29% of the target, budget expenditures amounted to 80.44%, according to the Office of the Auditor General.
The National Statistics Office has estimated Nepal’s economy to grow by 3.87% in the last fiscal year, 2023/24, while the Asian Development Bank and the World Bank have forecasted a growth of 3.6% and 3.3%, respectively.
In the current fiscal year, the government aims to achieve a 6% growth rate.
(With inputs from RSS)
