KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
In an address at the 46th SAARC Finance Governors Forum in Washington DC, Nepal Rastra Bank Governor Mahaprasad Adhikari characterized the country’s financial situation as “satisfactory,” citing stability in the financial sector and balanced inflation, bolstered by a foreign exchange reserve sufficient to cover 13 months’ worth of imports.
This optimistic outlook is crucial as Nepal navigates various economic challenges, including the skyrocketing prices of vegetables that are straining household budgets, particularly during the festive season.
However, while the financial sector may appear stable, other sectors such as agriculture and floriculture are reeling from the effects of heavy rainfall, which has disrupted production and led to significant financial losses.
This highlights the need for a holistic approach to economic resilience, where financial stability is matched by sustainable practices in agriculture and infrastructure development, ensuring that the benefits of economic stability reach all sectors and communities in Nepal.
NRB Governor Adhikari dubs Nepal’s financial situation ‘satisfactory’
Governor of Nepal Rastra Bank Mahaprasad Adhikari has said that Nepal’s financial sector is stable and inflation balanced with good foreign exchange reserve.
Addressing the 46th meeting of the SAARC Finance Governors Forum in Washington DC, Governor Adhikari said Nepal’s foreign exchange reserves are sufficient for the import of goods and services for 13 months.
Furthermore, Nepal’s remittance inflows and the financial market are stable. Governors of SAARC member states participating in the forum discussed about regional financial cooperation, collaborative research and capacity building among others.
Ring Road expansion in limbo despite agreement with China
Despite years of discussions regarding the extension of the second section of Kathmandu’s Ring Road, construction has yet to commence, with no anticipated start date in sight.
A cooperation agreement signed between Nepalese and Chinese officials on August 22, 2024, has failed to spur any progress on the project.
The second phase aims to extend an 8.2 km segment from Kalanki to the Basundhara culvert, financed by a Chinese grant, but it has faced considerable delays.
The first phase, connecting Koteshwar to Kalanki, started in 2069 BS and was completed in 2075 BS.
In contrast, the second phase has hit snags from both the Nepalese and Chinese governments.
Vegetable prices skyrocket
Prices for nearly all vegetables have skyrocketed, significantly impacting household budgets during the festive season.
Most green vegetables are now priced above Rs100 per kg, with some even exceeding Rs200 per kg.
Cauliflower, cowpea, green beans, bitter gourd, bottle gourd, potatoes, onions, chayote, pointed gourd, tomatoes, cabbage, eggplant, and okra are all selling for more than Rs100 per kg.
Almost a month after heavy rainfall in late September devastated crops and disrupted supply chains, vegetable vendors continue to attribute the price increase to these production and supply issues.
Floriculture business suffers damage worth Rs 150 million
The incessant rainfall that took place on September 27 and 28 has inflicted significant damage to the floriculture business as well.
As a result, the price of Sayapatri or Marigold flowers is expected to rise during the upcoming Tihar festival Flowers that had just started blooming were damaged due to the rain resulting in a loss of around Rs. 150 million, said Dilip Bade, chair of Nepal Floriculture Association.
For the upcoming Tihar festival, 1.5 million garlands are going to be imported from India.
Bade said that last year the cost was Rs 65 to Rs 70 per garland but this year the wholesale price will be around Rs 80 to Rs 85 per garland.
(Prepared by Srija Khanal)
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