Economy on positive track despite COVID-19: Finance Minister

Kathmandu: Minister for Finance Dr Yubaraj Khatiwada has said country’s economic indicators are in good condition though Nepal’s tourism, production and industry sectors are hit hard due to the impacts of COVID-19.

“Lockdown has led to downward revision of targeted output by around 6 percent; business survival particularly of SMEs is a big challenge to us; and tourism sector too has been hard hit.

Loss of jobs in informal sector and payroll protection in formal sector is a forefront issue. Trade, service and construction sector have been contracted and revival process is very slow,” he said at a virtual meeting with Vice President of World Bank Group South Asia Region, Hartwig Schafer.

Despite tough time, the inflation is tapped around 6 per cent and the current account deficit is limited to just two percent of the GDP while there is the surplus of USD1.6 billion in balance of payment.

“Having several headwinds, we could recover to some extent the shortfall in revenue collection in the last moment and maintain our treasury in comfortable position.

Overall macro indicators are broadly in a good shape with inflation around 6 percent, current account deficit at less than 2 per cent of GDP and balance of payment surplus of more than 1.6 billion dollars,” he said.

Overall fiscal sector is robust and the government treasury is not in deficit and that have helped to maintain economic stability in the country, the Finance Minister said.

Dr Khatiwada shared that budget of the current fiscal year has emphasized fundamentally on health and economic recovery and announced several schemes to supporting private sector for crowding in additional resources and deferral of immediate liabilities.

“Understanding the risk of reversal of development achievement, we have made several interventions in social sector and social protection,” the Finance Minister said, adding that Nepal is greatly engaged in containing the spread of virus, resume business activities and achieve the new normal output level.

“This requires additional resources as well. In this, we are much concerned on the foreign aid landscape during and post COVID scenario,” he stated.