Nepal Rastra Bank (NRB) has published the economic status for the three months ending mid-October 2024, revealing both positive and negative impacts on the economy. On the positive side, year-on-year (y-o-y) consumer price inflation eased to 4.82%, down from previous higher levels, bringing relief to consumers and stabilizing purchasing power. Remittance inflows surged by 11.5% in NPR terms, bolstering household incomes and contributing to a balance of payments (BoP) surplus of NPR 184.99 billion. This has strengthened Nepal’s foreign exchange reserves, now standing at NPR 2232.28 billion (USD 16.60 billion), ensuring a cushion for external shocks. Growth in deposits (2.6% in three months) and private sector credit (2.5%) indicates moderate confidence in the financial sector, supporting economic activities.
However, the report also highlights some challenges. Imports declined by 4.2%, and exports fell by 6.1%, reflecting weak trade performance that could hinder industrial growth and foreign earnings. While government expenditure reached NPR 329.20 billion, revenue collection lagged at NPR 248.26 billion, indicating fiscal imbalances that may strain public finances. Despite improved inflation, food prices in categories like vegetables and pulses surged sharply, burdening lower-income households. Slower growth in private sector credit (6% y-o-y) may limit business expansion and job creation in the long run.
Overall, while stable inflation and growing remittances support economic resilience, trade deficits, fiscal gaps, and uneven sectoral growth remain areas of concern, requiring targeted policy interventions.
