Policy uncertainty dents national economy, with stock market and imports hit hardest
Summary
A Nepal Rastra Bank study finds that economic policy uncertainty significantly harms Nepal's economy, with a drop of up to 10% in the stock market index and a 15% decline in imports.
Key Points
- Economic policy uncertainty in Nepal leads to a potential 10% fall in the Nepal Stock Exchange index.
- Prolonged uncertainty can reduce real imports by 15% and private sector credit by 5%.
- GDP is estimated to decline by around 2% due to policy uncertainty effects.
- The study recommends clearer, more transparent, and predictable fiscal and monetary policies to restore confidence.
