Nepal’s Economy is Gradually Recovering: Governor Adhikari

Governor of Nepal Rastra Bank (NRB), Dr. Maha Prasad Adhikari, has stated that the country’s economy, which faced setbacks following the devastating earthquakes of 2015 and the COVID-19 pandemic, is now gradually recovering two years after the pandemic.

Speaking at the International Conference on Economics, Finance, and Related Themes, jointly organized by Nepal Open University and Cardiff University, UK, on Thursday, Governor Adhikari noted that the construction, industry, and trade sectors have shown significant improvement in the post-earthquake and post-pandemic period.

"Nepal Rastra Bank has initiated key reforms through monetary policy alongside fiscal advancements," he said.

He added that the global economy is slowly and unevenly recovering from the impacts of the pandemic and ongoing geopolitical tensions.

Governor Adhikari emphasized the importance of policy harmonization across interconnected global markets to cushion the effects of global shocks on economic activities.

In addition to financial reforms, the NRB has undertaken major operational reforms in monetary policy aimed at improving the effectiveness of policy transmission. "Recent reforms have focused on modernizing monetary operations, enhancing credit quality, promoting digital banking and FinTech, developing a modern payment system, integrating it into the global market, and continuing financial consolidation," Governor Adhikari explained.

He also highlighted Nepal’s efforts to improve coordination between monetary and macro-prudential policies, with a focus on directing credit towards productive sectors to support sustainable economic growth and minimize the risk of asset bubbles.

Governor Adhikari reiterated that Nepal’s external sector remains in a comfortable position, with a balance of payment surplus, a current account surplus, and adequate foreign exchange reserves.

Vice-Chancellor of Nepal Open University, Shilu Manandhar Bajracharya, Professor Kul Luintel of Cardiff University, and other esteemed experts also shared their perspectives on economic and fiscal issues at the event.

The two-day conference, attended by 60 experts from Nepal, China, the UK, Norway, Spain, and other countries, will feature presentations and discussions on 10 working papers.