Why has Nepal's private sector lost confidence?
Summary
Nepal’s private sector is losing confidence as political instability, regulatory risks and weak demand discourage new investment despite lower interest rates and ample bank liquidity. Business leaders say firms are focused on protecting existing operations while the country’s public debt has crossed Rs 3 trillion.
Key Points
- Nepal’s overall public debt has crossed Rs 3 trillion for the first time, with external debt at Rs 1.598 trillion and domestic debt at Rs 1.410 trillion.
- Despite lower interest rates and sufficient liquidity, businesses remain hesitant to invest because of policy uncertainty, regulatory scrutiny and fear of arrests or raids.
- FNCCI president Anjan Kumar Shrestha says business confidence is at its lowest in decades, while former NCC president Rajendra Malla urges the government to improve investment security.
- Weak investment sentiment has also dragged down the stock market, with the NEPSE index falling by 32.65 points on Monday.
