High-level commission urges reforms to boost investment and cut production costs

KATHMANDU: The High-Level Economic Reforms Suggestion Commission has recommended structural reforms to create an investment-friendly environment and reduce production costs to revitalize Nepal’s slowing economy.

The commission’s report was submitted today to Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel by Commission Chair and former Finance Secretary Rameshwor Prasad Khanal at a ceremony held at the Ministry of Finance.

Chair Khanal stated that Nepal’s economic slowdown has been driven by weakening demand, declining investment, limited credit expansion, and a downturn in real estate transactions.

“The economy is facing a slowdown due to falling consumption and investment,” he said, citing insights from consultations with private sector stakeholders, business leaders from across the country, provincial and local government representatives, and economic experts.

Key reasons behind the stagnation include millions of rupees locked in troubled cooperatives, government delays in payment disbursement, sluggish credit growth, and a crisis in the construction sector. Khanal emphasized the need for immediate policy interventions to stimulate demand and promote structural reforms on the supply side to enhance competitiveness.

“Creating an investment-conducive environment and reducing production costs are crucial to achieving the targeted economic growth,” Khanal added.

Finance Minister Paudel welcomed the report and said it would be valuable in tackling ongoing economic challenges.

“As we prepare for the upcoming fiscal year’s budget, the commission’s findings and suggestions will be studied carefully and implemented in a phased manner,” he said.

The government had established the commission in October to recommend measures to revive the economy. In addition to Khanal, the commission includes National Planning Commission member Prakash Kumar Shrestha, Head of Tribhuvan University’s Central Department of Economics Ram Prasad Gyawali, economist Biswas Gauchan, and Policy Research Institute senior researcher Kalpana Khanal.