Global financial crisis affected Nepal: NRB

The Nepal Rastra Bank (NRB) on Sunday said that Nepali economy has started witnessing the impact of the global financial crisis.

Speaking at a press conference organised to release NRB's mid-term evaluation of the Monetary Policy of the current fiscal year, Dipendra Bahadur Chhetri, governor of NRB said that the economic growth expected by the government could not be achieved due to global financial crisis, high unemployment and inflation.

“The economy has started witnessing the impacts of the global financial crisis by the beginning of the second half of the current fiscal year and it is likely to squeeze the economic growth rate targeted for the current fiscal year,” said the report.

Nepalis abroad are continuing to lose their jobs, consequently decreasing the remittance that enters Nepal, Chhetri informed.

“The high inflation which touched 14.4 percent by the first half of the current fiscal year and was expected to remain at 11 percent on annual average is really a worrisome development,” said Chhetri warning that the inflation rate will stand at 11 per cent if the crisis continues.

“High revenue mobilization and negative growth seen in the government’s expenditure is also resulting in the liquidity position to contract,” said the report.

The report added that the expected economic recovery during the current fiscal year remained much weaker than expected mainly due to the worsening power crisis and weakening investment confidence.