Economy & Development

Shrinkflation as the coping mechanism of companies regardless of consumer rights

An unfavorable economic context The world economy is undergoing the effects of the Covid-19 pandemic and the war in Ukraine which both provoked a shock in demand and supply globally.  The annual growth rate of CPI in April 2022 amounted to 9.2% in OECD countries. Nepal’s economy was recovering from the effect of the earthquake…

Continue Reading Shrinkflation as the coping mechanism of companies regardless of consumer rights

Common Vision: Nepal and India’s new agreement.

Prime Minister Sher Bahadur Deuba on 01 April 2022 embarked on a three-day official visit to India after taking over the premiership from KP Sharma Oli back in July of 2021. His entourage consisted of Dr. Narayan Khadka (Minister of Foreign Affairs), Ms. Pampha Bhusal (Minister of Energy and Water Resources), Mr. Birodh Khatiwada (Minister for Health and Population) and Mr. Mahindra Ray Yadav (Minister for Agriculture and Livestock). While the Prime Minister alongside his Indian counterpart – Narendra Modi reviewed many projects of mutual benefits including political, economic, trade, energy, security and development issues; the one that stood out the most was the agreement for hydropower development. According to Nepal’s Ministry of Foreign Affairs (MoFA), the two countries have agreed on a ‘Joint Vision Statement on Power Co-operation/Common Vision Agreement’, aimed at benefitting both countries by strengthening employment generation, enhancing export earnings and furthering capacities of energy/power industries.

Continue Reading Common Vision: Nepal and India’s new agreement.

Fertilizer Crunch – a Perennial Issue in Nepal

Context: Nepal and India on 01 March 2022, signed a government-to-government (G2G) deal to procure chemical fertilizers for the next five years. The memorandum of understanding (MoU) signed by Govinda Prasad Sharma (Secretary at Nepal’s Ministry of Agriculture and Livestock Development) and Rajesh Kumar Chaturvedi (Secretary at India’s Ministry of Chemicals and Fertilizers) assures to…

Continue Reading Fertilizer Crunch – a Perennial Issue in Nepal

Replacement Budget Bill 2021/22

Substitution Budget The Sher Bahadur Deuba government has laid a new bill for Nepal’s annual financial plan. Finance Minister Janardan Sharma on September 10 unveiled a new federal budget of Nrs. 1.632 trillion (USD 13.86 billion) for the ongoing fiscal year (FY) 2021/21, replacing the previous ordinance budget presented by Bishnu Paudel (the then Finance…

Continue Reading Replacement Budget Bill 2021/22

Nepal’s trade relations with its neighbors and the role of economic diplomacy

Photo: RSS Centre for Social Inclusion and Federalism (CESIF) organized a webinar on February 24, 2020, focusing on “Nepal’s trade relations with its neighbors and the role of economic diplomacy.” Speakers: Mr Purushottam Ojha – He served as the Secretary of Ministry of Industry, Commerce, and Supplies. He is currently a freelance consultant in the…

Continue Reading Nepal’s trade relations with its neighbors and the role of economic diplomacy

News Digest: Economy and Development (February 03 – 09, 2022)

Money and Banking Nepal Rastra Bank (NRB) on 04 February 2022 issued a notice to the public regarding the risks involved in carrying financial transactions through electronic means. Through the notice, NRB has urged individuals to stay wary of temptation to cash lottery, misuse of mobile applications, solicitation of passwords and one-time password (OTP) while…

Continue Reading News Digest: Economy and Development (February 03 – 09, 2022)

News Digest Economy & Development (January 27 – February 02, 2022)

Money and Banking Nepal Rastra Bank (NRB), on 31 January 2022 fixed the premium amount on interest rate of hire purchase loan being charged by companies. By issuing a directive, NRB has capped the premium interest rate for 4 percent. Similarly, in the same directive, NRB has also made it mandatory for hire purchase companies…

Continue Reading News Digest Economy & Development (January 27 – February 02, 2022)

News Digest: Economy & Development (January 20 – 26, 2022)

Money and Banking According to Nepal Rastra Bank’s (NRB) six months data on refinancing, the central bank has injected Nrs. 13.61 billion (into the economy) within the first half of the current fiscal year (FY) 2021/22. In the financing injected, Rastriya Banijya Bank (RBB) has been identified as the largest refinancing bank with Nrs. 1.45…

Continue Reading News Digest: Economy & Development (January 20 – 26, 2022)

News Digest: Economy & Development (January 13 – 19, 2022)

Money and Banking By introducing a ‘Financial Literacy Framework Directive’ on 17 January 2022, Nepal Rastra Bank (NRB) has made it mandatory for banks and financial institutions (BFIs) to invest at least one percent of their annual profits in financial literary programs to promote e-literacy across the nation. Similarly, NRB has also directed BFIs to…

Continue Reading News Digest: Economy & Development (January 13 – 19, 2022)

News Digest: Economy & Development (January 06 – 12, 2022)

Money and Banking Commenting on the current economic situation in the Public Accounts Committee of the parliament on 09 January 2022, Governor of the central bank (NRB) affirmed that attaining the economic growth target of 7 percent and maintaining an inflation rate of 6.5 percent will be a challenging task in the current fiscal year…

Continue Reading News Digest: Economy & Development (January 06 – 12, 2022)

News Digest: Economy & Development (December 16 – 22, 2021)

Money and banking The United Kingdom government’s development finance institution, CDC Group announced a Nrs. 3.03 billion (USD 25 million) loan to Global IME Bank Ltd., to enhance the bank’s ability to provide credit to businesses across key economic sectors across the country. The capital facility is anticipated to assist the bank in providing credit…

Continue Reading News Digest: Economy & Development (December 16 – 22, 2021)

September Analysis: Economy and Development

After one and a half months, the border crossings with China at Tatopani in Sindupalchok and Rasuwagadhi in Rasuwa have reopened. The border crossing point had previously been closed by China reasoning the rise in COVID-19 cases in the Tibet Autonomous region. Before that, since March 2020 the checkpoints hadn’t been on smooth operations, with occasionally few trucks allowed to drop goods on side of the border. China has allowed the consignments to enter Nepal from Tatopani and Rasuwagadhi border points.

Continue Reading September Analysis: Economy and Development

August Analysis: Economy and Development

With Nepal Electricity Association (NEA) reporting a profit of Rs. 16.1 billion in 2021/22, the prospect of reliving Nepal’s trade deficit problem through the expansion of its hydroelectricity sector is promising. Likewise, amid increased exports and investments, India has emerged as a strong energy trade partner. While the annual Nepal Rastra Bank report for 2021/22…

Continue Reading August Analysis: Economy and Development

July Analysis: Economy and Development

The previous fiscal year, to battle the economic slump induced by COVID, NRB had put forth a liberal monetary policy. Credit expansion and loosened requirements for banks, coupled with a post-pandemic economic boom, contributed to increased imports and a liquidity crunch in the banking sector. The new monetary policy, in line with what is being observed globally, is contractionary and aims to reel in the economy.

Continue Reading July Analysis: Economy and Development

Proceedings Report: Infrastructure Financing in Nepal

Introduction As a country at the cusp of least developed country (LDC) graduation, Nepal is committed to the development of infrastructure, and consequently, understanding how such infrastructure expenditures are financed has become a prominent topic of discussion in the country. According to the Public Debt Management Office, as of April 2022, Nepal’s total outstanding debt…

Continue Reading Proceedings Report: Infrastructure Financing in Nepal