Economic Situation Manageable

On November 22, 2007, speaking at a regular press meet held at the Ministry of Finance, Finance Minister Dr. Ram Sharan Mahat pointed out that the export competitiveness had been remarkably deteriorating due to the depreciation of the US dollar and rise in the cost of transportation in the recent months; the export declined by 5.9 per cent; “however, the overall health of the country's economy is still manageable. It has not gone beyond control. There is no need to worry. The treasury position that seemed to have witnessed a sharp fall is still at satisfactory level,” said Minister Mahat according to the state-run newspaper ‘The Rising Nepal’ of November 23, 2007.

Dr. Mahat said that the government has not taken out the overdraft beyond the limit of norms. It is still within the five per cent of the total revenue. The total overdraft reached Rs 3.56 billion in October this year. However, it was not beyond the given norms. “Until November 06, 2007, the overdraft was 'slightly up', but we have managed to be at comfortable position at the moment,” said Finance Minister Dr. Mahat.

Until last week, the collection of revenue met 100 per cent target. It was 17.5 per cent higher than the collection made in the same period in the fiscal year 2005/06. Talking about the expenditure, he said that the overall yearly expenditure has gone up by 26 per cent. The capital expenditure has gone up by 85.5 per cent and the regular expenditure by 26 per cent due to the increase in the salary of government employees and increase in wage bills

Minister Dr. Mahat also noted that the International Monetary Fund (IMF) is providing a total 79.1 million US dollar trance for the PRGF program. A total of 16 million US dollar trance has already received. In addition, the IMF's review meeting has made a positive note on the Nepal's economic situation. On top of that, various donor agencies and donor countries have extended their significant contributions to and assistance for the Nepal's development, he said adding, “The World Bank's assistance for Nepal is the highest as of now."

The income from remittances has increased by 17.3 per cent. The total amount of foreign reserve is Rs 162.36 billion.