Economy Slows Despite High Liquidity and Remittances, Investment Lags
Summary
Despite record liquidity and strong remittance inflows, Nepal’s economy remains sluggish as private-sector credit, industrial activity, and investment fail to pick up. The Federation of Nepalese Chambers of Commerce and Industry says policy hurdles, weak demand, and disaster losses are constraining growth.
Key Points
- Excess liquidity of Rs 1.266 trillion and remittances above Rs 2.3 trillion have not translated into higher investment or job creation.
- The Federation of Nepalese Chambers of Commerce and Industry says weak demand, policy barriers, and low private-sector credit are slowing the economy.
- Industries are operating at only 44.5 percent capacity, while credit growth to the private sector remains far below the central bank’s target.
- Flood damage in Rasuwa and disruptions at the China border crossing have further increased economic risks and losses.
