Prime Minister Pushpa Kamal Dahal has said that the economic indicators have turned positive in recent times.
Addressing a programme organised here today by Society of Economic Journalists-Nepal (SEJON), PM Dahal said that there has been improvement in economy over the last two months, but warned it might not be sustainable.
"Last year, there were concerns that the country could face economic downturn like Sri Lanka. But we have witnessed some positive eco-nomic indicators in the last two months. Nevertheless, it may not sustain, so we should identify primary areas to uplift our economic situation."
Recalling that the first Cabinet meeting of his government had prioritised the economy of the country, he stressed on the need for economic reforms.
Likewise, Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel said that the country's economy is still struggling despite some positive economic indicators recently, and that some immediate steps need to be taken to get the economy back on the right track."There is structural default in Nepal's import-based economy.
The target of revenue collection is not being met this fiscal year. Import has been increasing annually whereas our exports have failed to keep pace and therefore our trade deficit continues to widen," he said.
"Moreover, we couldn't create a favourable environment to attract foreign investment into the country, while there is liquidity crunch, high interest rates and we are highly dependent on remittance," he added.
Finance Minister Paudel emphasised the need to increase capital expenditure and foreign direct investment and promote local production to reduce dependence on remittance.
Meanwhile, Nepal Rastra Bank Governor Maha Prasad Adhikari said that strict measures such as import restriction and 100 per cent cash margin to open LC were necessary as per the economic situation but were temporary and transitional.
"As the country's foreign reserves was depleting we were compelled to launch such strict measures. However, the policies have been amended as there had been slight improvement in the situation," Adhikari informed.
