KATHMANDU, April 18: A delegation including President of Confederation of Nepalese Industries (CNI) Vishnu Kumar Agrawal has called on Finance Minister Janardan Sharma. During the meeting held at the Ministry of Finance, the overall condition of the economy was discussed.
During the meeting, CNI-affiliated industrialist Anuj Agrawal presented a working paper on the current economic situation of the country, focusing on two main issues– easing the pressure on foreign exchange reserves and addressing the problem of liquidity crunch.
Agrawal said that it is not logical to compare Nepal's economy to that of Sri Lanka. He informed all the participants that Nepal's Gross Domestic Product (GDP) is US dollar 33.65 billion while Sri Lanka's GDP is $ 80.7 billion.
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Similarly, Nepal's debt stands at $14.56 billion and Sri Lanka's at $ 89.5 billion. This means that Nepal’s share of debt in GDP is 43 percent while Sri Lanka's stands at 111.42 percent.
Agrawal in his working paper also shared that Nepal's total foreign exchange reserves stands at $ 9.58 billion whereas Sri Lanka's foreign exchange currently stands at USD 1.94 billion.
Similarly, Nepal's inflation reached 7.1 percent and Sri Lanka's 25 percent due to the impact on the international price chain. Agrawal argued that Nepal's economy is much stronger than that of Sri Lanka in the main indicators if we see the country’s economic outlook.
On the occasion, CNI Chairman Vishnu Kumar Agrawal suggested that instead of banning imports, the tax rate should be increased and the interest rate on loans for imports should be changed to overcome the pressure on foreign exchange reserves. He also suggested imposing different interest rates on loans for production and imports.
Stating that significant improvements have been made in the domestic and international tourism sector, Agrawal said that infrastructure construction and packages to attract tourism should be announced. He suggested issuing gold-based bonds, offering an additional 2 percent interest rate on remittance deposits, and attracting non-resident Nepalis to open dollar accounts.
On the occasion, Finance Minister Sharma said that he had repeatedly said that Sri Lankan economy is not comparable to Nepal’s economy. "Some people are trying to politicize the country's economic situation,” said Minister Sharma. "In fact, Nepal's economy is not like that of Sri Lanka and we are working to bring reforms in the economy to make sure that it does not face the fate of Sri Lanka.”
