Troubling sign

The ultra-low inflation rate masks deep problems with the national economy.

The Nepal Premier League was the exception that highlighted the start contrast with the norm. The four-week cricket extravaganza was a big financial success. Nepal’s cricket regulator alone amassed a revenue of around Rs400 million. Factoring in all the money sloshing around in terms of tickets, sponsorships, extra spending on food and travel, among other expenses, the total spending is believed to have surpassed Rs1 billion. Yet for an economy of around $50 billion dollars, it was still a pittance. The hard reality is that the national economy has been stagnant for some time—and the Gen Z revolt in early September put further skids on it. Businesses are not investing. Money continues to pile up in banks even as interest rates plummet. Job creation is anemic. Hardly a surprise then that people don’t have much to spend, and as a result of weak market demand, inflation has fallen to nearly 1 percent as of mid-November—hitting a 22-year low. This is a sign of trouble ahead.