Recession is worsening despite the govt's false assertions of economic recovery: CNI

Published On: January 2, 2024 07:50 AM NPT By: Republica | @RepublicaNepal

CNI survey report shows overall demand for manufactured goods, construction materials and consumers’ goods fell down further in Q1 this FY

KATHMANDU, Jan 2: The private sector has criticized the government for bragging about the improvement in external sector indicators to cast a shadow to the existing problems of the domestic economy, stating that the economy is rather grappling with recession.

A survey report published by the Confederation of Nepalese Industries (CNI) shows that there was a massive fall in aggregate demand, surged in prices of raw materials and a notable drop in imports of the raw materials in the first three months of the current fiscal year compared to the same period in the last fiscal year.

According to the umbrella organization of the private sector, the overall demand declined further by 12.06 percent in the review period this year.

From mid-July to mid-October last year, the aggregate demand fell 28.28 percent. Compared to the end of fiscal year 2022/23, the demand declined 36.93 percent in the first quarter this year.

The transaction volume of the manufacturing sector further declined 7.46 percent. In the review period last year, this sector witnessed a fall of 24.94 percent.

Few days ago, Prime Minister Pushpa Kamal Dahal, while unveiling the work progress of the government after completion of a one-year term, painted a rosy picture of the economy, expressing his ‘great achievement.’ While flattering himself, Dahal tried to take credit for the whooping rise in foreign currency reserves due to the high remittance inflows, overshadowing the adverse situation that the domestic economy has been experiencing for over the past one year.

The CNI report shows that the confidence level of the entrepreneurs, which had started to deplete since last year, has further gone down this year. As a result, 55.32 percent of the entrepreneurs are in a ‘wait and watch’ mode and have put on hold their plans to extend investment in the country’s business sector.

The demand for cement decreased 39 percent in the review period last year. This year, the transaction of cement depleted further by 9.54 percent.

Apart from the demand for manufactured goods and the construction materials, the overall demand for the consumer goods also fell 17.70 percent this year. In the review period last year, the demand for fast-moving consumer goods increased 2.50 percent.

CNI President Rajesh Kumar Agrawal said the government has been publishing fake reports to its advantage. “Improved indicators of the external sector alone does not ensure a better-off economy in general,” he said.