Nepal Economic Digest (Feb. 25, 2020)


February 25, 2020


Nepal Economic Digest (Feb. 25, 2020)
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KATHMANDU: Economic Digest, a daily morning email digest, is basically a relatable summation of important business news from Nepal into easy-to-understand summaries.

Nepal Airlines to sell 25 percent stake

Nepal Airlines board is planning to sell off 25% of the government’s share to other state-owned enterprises in hopes of raising capital.

“We have decided to divest a 25 percent stake in Nepal Airlines as this will allow state-owned firms like the Employees’ Provident Fund, Citizen Investment Trust, Nepal Oil Corporation and others entities to invest in the carrier,” said Tourism Secretary Kedar Bahadur Adhikari, who is also the chairperson of Nepal Airlines Corporation.

However, aviation and economic experts believe that the plan is just smoke and mirrors.

Cement, steel industries in trouble as demand declines

Officials of the Birgunj Chamber of Commerce and Industries said that the industries have decreased 75% of their production as the demand is less than the production capacity.

According to the statistics of the Birgunj Customs Office, the main raw materials imported for the industries have also decreased. Construction materials produced in the corridor are sold all over the country.

Cement and rod producers are facing the brunt as their production capacity is more than the demand for their products in the market.

Gold sold at Rs 80,300 per tola

The price of gold has reached an all-time high of Rs. 80,300 per tola. One of the reasons for the price hike is the coronavirus, as people from Europe and the US are investing in gold.

The price of gold has been rising steadily in the domestic market since July 2019, with occasional drops.

Payment to MWSP subcontractors yet to be finalized

The status of payment which the Italian company, CMC, has to make to the subsidiary contractors and suppliers is still not decided.

The CMC was the main contractor of the Melamchi Water Supply Project before it abandoned the project in the middle. The Ministry of Water Supply and Sanitation has stated that although the wages remaining to be paid to the local laborers have been finalized, the payment to the sub-contractors and suppliers has not been and preparations were underway for the same.

The Ministry has formed a technical committee to study the dues the Italian company owes on the basis of claims for payment made by the subsidiary contractors and suppliers.

Coronavirus outbreak to cost Asia $115 billion in lost tourism revenues

Asian economies could lose $105-$115 billion in the gross domestic product (GDP) this year due to a slump in tourism following the outbreak of the coronavirus, ING said in a report.

“If we assume that tourism to and from China basically grinds to a halt in 2020, and extra-regional tourism also diminishes, then the cost to the region from lost tourism revenues alone is approximately $105-$115 billion,” said Robert Carnell, ING’s chief economist for Asia-Pacific.

Fears of a coronavirus pandemic grew on Monday after sharp rises in new cases reported in Iran, Italy and South Korea.

Black cardamom traders ask government to facilitate exports

Traders involved in the trade of black cardamom have urged the government to start talks with authorities of India and Bangladesh to facilitate the export of the cash crop.

According to the Federation of Black Cardamom Entrepreneurs of Nepal, the country produces around 6,000 tons of black cardamom and about 95% of total production is exported to India.

The value of Nepal’s black cardamom exports rose from US$ 7,440,000 in 2004 to $39.4 million in 2013. Since 2006, direct exports of black cardamom from Nepal to markets like Singapore, Pakistan and the United Arab Emirates have fallen to less than 1% of total productions, according to the report.

As of now, Nepal is the world’s largest producer of black cardamom. India and Bhutan are among other major producers of this farm product.

Govt proposes unbundling of CAAN

The Ministry of Culture, Tourism and Civil Aviation has decided to split the Civil Aviation Authority of Nepal (CAAN) into regulation and operation bodies with the hope that Nepal will be removed from the aviation safety list of the European Union.

Despite objections from CAAN employees, the Ministry is making the change. After splitting CAAN, the body will be responsible to issue licenses to airlines, or scrap the license, monitor the aviation sector and take action against operators violating the rules.

The newly-formed authority, on the other hand, will be responsible for providing air navigation services in the aviation sector of Nepal.

QRDC intensifies study to develop short tunnels in major highways

Quality Research and Development Centre under the Department of Roads has intensified its field study in order to develop short tunnels in major highways across the country.

According to officials, the Ministry of Physical Infrastructure has earmarked Rs 590 million for the construction of the tunnels.

The government has set the target to prepare 13 tunnels feasibility reports within the fiscal year 2019/20. Five reports have been prepared so far.

(Compiled and prepared by Swastik Aryal and Nitish Lal Shrestha)

Nepal Economic Digest is a daily morning email digest, basically relatable summations of the most important business news, happenings from Nepal into easy-to-understand summaries. The Institute for Strategic and Socio-Economic Research (ISSR), Nepal’s independent think tank, and Khabarhub — Nepal popular news portal — have joined hands to disseminate news from Nepal in the form of Economic Digest.

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