Money is cheap in Nepal. Businesses still aren’t investing

Banks are flush with lendable funds and interest rates are low, yet businesses remain reluctant to borrow and invest, reflecting weak confidence in the economy.

Nepal’s economy grew by nearly 6 percent in fiscal year 2021-22, soon after the Covid-19 pandemic. The main driver was a release of pent-up demand and a sharp increase in imports after the pandemic had kept both activity and consumption in check.