So far, the country had lacked any such model despite having more than five decades long history of planned development. [break]The model, officials said, will allow the NPC to correctly assess the macroeconomic performance generated from policy interventions and shocks.
“As the model is consistent with MDGs, henceforth, we can easily assess macroeconomic projections with or without government interventions in order to achieve MDGs by 2015,” said NPC Vice Chairman Deependra Bahadur Kshetry.
Most importantly, he added, it will enable the government to optimize resources and help to strengthen MDGs based macroeconomic planning. The model was developed with the technical and financial assistance of United National Development Program (UNDP).
Highlighting the features of the model, Ram Sharan Kharel, deputy director of Nepal Rastra Bank (NRB) said the model addresses MDGs in three ways: by incorporating poverty-growth nexus, by making public expenditure as a policy variable in order to link the investment requirement to attain MDGs by 2015, and by allowing availability of foreign assistance, as and when required, to meet the expenditure requirements.
“The model can be used for policy simulations using multiple variables at a time as the policy requirement,” said Kharel.
But for now, the NPC has exercised on two scenarios.
The first scenario is the baseline forecast, which depicts macroeconomic forecast for 2011-15 without policy interventions and shocks, that is, when the economy follows its regular path, said Kharel.
The second scenario provides forecast of macroeconomic variables and MDGs if the government realigned policy interventions using its recurrent and capital expenditures.
UNDP Nepal Country Director Shoko Noda expressed hope that Nepal government will make use of the newly developed model, so that it could better align its resources and deliver promises made to the poor and general public.
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