Economic Austerity Move

Nepal’s economy is not in a good shape. Internal and external factors are behind the slow pace of economic activities. Three years ago, the COVID-19 pandemic disrupted the entire economic system nationally and globally. Tourism, trade, business and industrial sector, hit hard by the pandemic, is still struggling to come to terms with the crisis. Post-pandemic economic recovery is not optimistic either. Widening trade deficit, imbalance in the Balance of Payment, depleting foreign currency reserves, declining amount of remittance and capital flight are some visible causes of our economic downturns. Russia-Ukraine war has further exacerbated the economic woes as it increased energy prices and choked Nepal’s import-based export trade. Of late, high interest rates have affected the business sector. Banking and Financial Institutions (BFIs) are unable to disburse loans to the business persons in the absence of the adequate deposits.