Issuing a press statement on Friday, IMF said that Nepal's macroeconomic performance has been held back by the earthquakes and the recent unrest and disruptions to transportation and trade routes following the promulgation of new constitution. "While macroeconomic management has been broadly satisfactory, Nepal's macroeconomic performance has been held back by the earthquakes and the recent unrest and disruptions to transportation and trade routes," reads the statement.
Moreover, IMF has also warned that Nepal's economy wouldn't rebound if possible measures are not taken on time.
Earlier, IMF had predicted Nepal's economic growth rate to be 4.4 percent in the running fiscal year based on assumptions like increase in capital expenditure and acceleration in reconstruction works.
Informing that the economic growth rate would slowly rebound as reconstruction activities gets momentum, IMF also called for policy action to boost capital spending, maintain macroeconomic stability, and lift potential growth. IMF also said that growth is expected to gradually rebound to around 5.5 per cent by 2016/17, as economic activity recovers from the earthquake and reconstruction gains momentum. IMF has projected inflation to rise to around 8.5 percent.
"Stepping up foreign aid and higher inflows of remittances will further boost liquidity pressures in the financial system, necessitating active liquidity management to avoid excess inflation relative to India," IMF added.
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