#news #IMF #Nepal #EconomicGrowth
The International Monetary Fund (IMF) has completed its fifth review of the Extended Credit Facility (ECF) made available to Nepal. As part of this review, the IMF has approved the release of around NPR 5.81 billion (approximately USD 48.18 million) to Nepal under the ECF program.
Despite facing political instability and the recent floods in the month of Ashoj, Nepal has shown significant progress, attributed to factors such as increased capital expenditure, reconstruction post-earthquakes and floods, sound monetary policies, growth in hydropower production, among others, which are expected to further boost Nepal’s economic growth this year, as per the IMF.
Ramesh Khatri, a representative of Kansai Nepal News, commented that the IMF’s acknowledgment of Nepal’s economic progress amidst internal demand weaknesses and various challenges in the economic landscape highlights a positive outlook for the country’s financial stability.
IMF’s mission chief for Nepal, Bo Li, mentioned in a press release after the Executive Board meeting that despite political uncertainties and past natural disasters, Nepal has made expected progress in implementing economic reforms. However, with diverse risks in the economic outlook, policymakers are advised to remain vigilant to ensure stability, as emphasized by the IMF.
Looking ahead, the IMF stressed the importance of enhancing Nepal’s financial stability through economic growth, robust fiscal management to support social safety nets, and strengthening internal revenue collection. Additionally, measures such as prudent management of capital spending, improvements in financial sector weaknesses, and addressing political instability are crucial for sustained economic growth, as per the IMF’s recommendations.
As Nepal moves into the grey list of the Financial Action Task Force (FATF), the IMF also highlighted the need for vigilance in asset regularization and financial investment controls in combating money laundering and terrorist financing activities. Regulatory reforms have been suggested as a priority to address these issues.
To foster a more investment-friendly environment in Nepal, the IMF suggested institutional strengthening for developing a business-friendly climate, reducing the cost of doing business, enhancing governance, and controlling corruption. Moreover, taking proactive steps to mitigate the impacts of climate change-induced natural disasters is deemed crucial by the IMF for Nepal’s sustainable development.
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Author: MAYA | HARUTO
Posted at: March 15, 2025 7:00 pm
