Half-empty economic cup

If the prime minister wants to pep up the economy, he should start by correcting his own inconsistencies.

Some signs suggest a rude health of the national economy. Nepalis abroad sent Rs136.97 billion in the mid-September to mid-October period, the highest ever monthly remittance in the country’s history. With this, gross foreign exchange reserves jumped by 6.7 percent to Rs1.64 trillion in mid-October 2023, up from Rs1.53 trillion in mid-July 2023. The banks and financial institutions sit on Rs500 billion in cash, and a more-than-healthy 120,000 tourists entered the country in October. And yet the economy is far from being on a strong footing. First, even though the financial institutions are awash in cash, only a few are taking out loans, partly because of the high interest rates and partly because would-be entrepreneurs espy no climate to do business. The sad corollary to the rapid rise in remittance is that more and more young folks are leaving the country to work and study—many to never come back. With above a million people heading out of the country every single year, the demand for consumable goods has also shrunk rapidly, acting as another big damper on the economy.