Economy is sluggish but not in crisis: Finance Minister Pun

KATHMANDU: Finance Minister Barshaman Pun has said that although the country’s economy is somewhat sluggish, it has not reached a situation of crisis.

Addressing the 34th anniversary programme of the Citizen Investment Trust (CIT) today, he claimed that the economy is beyond crisis and much improvement has been seen in the external sector.

However, Minister Pun admitted that some structural challenges remained in the public finance sector. He said that the negative over-publicity that the country’s economy is on the verge of collapse has had its impact on the market.

“We have foreign currency reserves sufficient to cover the imports of goods and services for over one year. The remittance inflow is excellent. There is adequate liquidity in the banks and financial institutions. The investment will also gradually increase now,” the finance minister said.

According to him, the external sector has presently become stronger as against the criticism some time back that Nepal’s economy is also heading towards collapse like that of Sri Lanka, as the external sector, especially the balance of payments, looked bleak.

The finance minister expressed worry, saying the market thinking has not improved yet despite the positive economic indicators. He said investment can go up which will help in the economic growth if there is positive thinking and self-confidence in the market.

On the occasion, he gave assurance that he would continue the positive policies and plans brought by the former finance minister and adopted by the government before this. He added that the strict policies adopted in the past due to the economic contraction would be gradually made flexible.

According to him, discussions are being held with various line ministries and various agencies about this. Stating that signs of improvement have been seen in the stock market of late, he believed that it would help stimulate the market.

The finance minister stressed on the need of all sides and agencies to be responsible and accountable for facilitating the service delivery. “The political leadership has problems. We ourselves have felt the need of political sanctification. There is a need for administrative reforms in our public bodies,” he reminded.

He urged the CIT management to invest the deposits with it in the productive sectors, big infrastructure construction projects and employment generation sector, becoming more professional. Minister Pun called on CIT to contribute to the national capital formation by mobilizing its deposits in the productive sector increasing productivity and job creation.

CIT Executive Director Parbat Kumar Karki said the CIT has played an important role in determining the basis of national capital formation by mobilizing the savings. According to him, the CIT is carrying out works in a planned way in expanding its business, profit-oriented investment and risk management, among other sectors.

Executive Director Karki claimed that CIT is increasing investment in the infrastructure sector prioritized by the government, making the CIT’s works more technology-friendly and facilitating the service delivery. He further shared that a study has been initiated to connect the citizens in foreign employment in the CIT’s program.

According to him, the net reserves of CIT as of mid-January of the current fiscal year is Rs 240 billion and 510 million while it has invested Rs 235 billion and 50 million during this period.