Top Economic news for this week- 13th Chaitra to 19th Chaitra

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Chaitra 20, 2072- This week's main events that provide insight into current Nepalese economic environment have been briefly presented below:

  • The 19th edition of Flora Expo is all set to kick off in Kathmandu from Thursday. The four-day event is being organized by Floriculture Association of Nepal (FAN) at the Bhrikuti Mandap Exhibition Hall. According to the organizers, the exhibition will have 64 and will showcase different seasonal flowers, decoration flowers, cut flowers and drip flowers as well as seeds, tools, and books as well materials regarding gardening.
  • Private bank and financial institutions (BFIs) seem to have been reluctant to support the government's program of providing subsidized agro loans. Loans floated by private BFIs account for meager share of total credit expanded to farmers on six percent subsidized interest rates as announced by the government. According to Nepal Rastra Bank (NRB), private BFIs have expanded only Rs.15 million out of Rs.1.16 billion worth of subsidized agro loans as of mid-February.
  • Acceleration of reconstruction works is a key to Nepal's economic recovery, according to a senior official of the Asian Development Bank (ADB). The senior official also said that ADB will build on its existing support in the energy sector and will extend assistance for 25 MW grid solar power plants and two major storage hydropower projects — Dudhkoshi (300 MW) and Nalsing Gadh (410 MW).
  • Wencai Zhang, the vice president of Asian Development Bank (ADB), has said that Melamchi water will reach Kathmandu by April or May next year. Government officials are also hopeful of the project meeting its new deadline as the Italian contractor for tunnel works, Cooperativa Muratori e Cementisti di Ravenna (CMC), has accelerated tunnel digging works in March. But they say the contract must accelerate its work further if it is to meet the new deadline.
  • Nepal Oil Corporation (NOC) has called on consumers not to run after the rumours that the country was likely to face the fuel crisis again. In a press statement Monday, the state monopoly fuel supplier said there was no problem in importing fuel from India.
  • The government has started tender process to upgrade two strategic roads that connect Nepal with China, officials of the Department of Road (DoR) said on Monday. Minister for Finance Bishnu Prasad Poudel recently gave go-ahead to two separate proposals that pave the way for DoR to begin procurement process to upgrade Galchhi-Trishuli (24 km) road section into a double-lane black-topped road, and gravel Jomsom- Kora La (100 km) road.
  • Work of Hulaki Rajmarga, which is popularly known as postal highway, has been stalled even though the government has already built 45 concrete bridges along the highway. The highway project began in 2010 with grant assistance of the Government of India. As per the agreement signed with India, Nepal has to build bridges using internal resources. Of the 1,792-kilometer project, only 67 kilometers – Lamki-Tikapur section (27.5 km) and Seti-Bhajani section (40 kilometers) are being blacktopped. Similarly, 58 bridges are under different stages of construction while work on 46 bridges has yet to begin. According to the agreement, India will provide grant assistance to build 607 km section of the 1,792-kilometer project.
  • Nearly Rs.3 billion collected in Price Stabilization Fund, which was established by the government nearly two years ago to cushion consumers against hike in price of petroleum products, has not been of much use to consumers. Consumers, who are paying high price for petroleum products despite significant drop in price of petroleum products in the international market, have not been able to get any benefit from the fund.
  • Exports of cash crops such as fruits, vegetables and spices from eastern hill districts of Dhankuta, Therathum, Shakhuwashaba have reached around Rs850 million annually on a average. But stakeholders say with adequate processing, branding, packaging and labeling, the exports could be increased to Rs4.5 billion per year.
  • The Tribhuvan International Airport (TIA) improvement project will be delayed by two years due to a slowpoke contractor, the Civil Aviation Authority of Nepal (Caan) said. The Spanish contractor Constructora Sanjose has been working very slowly, said Caan, which is executing the $92-million project funded by the Asian Development Bank (ADB).
  • Prime Minister KP Sharma Oli said on Monday his recent visits to India and China have opened up new avenues for bilateral and trilateral cooperation for accelerating Nepal’s development and uplifting the lives of the Nepali people. As per the joint communiqué issued by Nepal and China, two countries signed transit agreement, giving Nepal access to Chinese ports. They also agreed to carry out major projects under the framework of the Belt and Road Initiative.
  • The government has begun preparation of operational modalities to use Vishakhapatnam of India for third-country trade. According to officials, the operational modalities will be tabled in Nepal-India commerce secretary-level meetings scheduled to be held in May.
  • Record-setting rally of Nepal Stock Exchange (Nepse) in recent weeks has made Securities Board of Nepal (Sebon) 'nervous'. The capital market regulator has already issued two statements in three weeks, urging investors to take caution while making investment in the stock market. The benchmark index has amassed 416 points, or recorded a growth of 43 percent, in last eight months to close at record high of 1,377.33 points on Sunday. Putting an end to gaining streak over the past few weeks, Nepal Stock Exchange (Nepse) index plunged 21.85 points this week to close at 1,355.48 points on Thursday, the last trading day of the week.
  • Uncertainty looms large over the development of the 750MW West Seti Hydropower Project, as the Nepal Electricity Authority (NEA) has failed to assure China Three Gorges Corporation (CTGC) about the market once the project starts generating power, a sub-committee under the Parliamentary Agriculture and Water Resource Committee (AWRC) has said.
  • Nepal Oil Corporation (NOC) has written to the Indian government requesting a supply of another 15,000 tonnes of cooking gas for next month as the country continues to suffer from a crippling shortage even one and a half months after the end of the embargo. Cooking gas shipments from Indian Oil Corporation (IOC) are expected to reach 25,000 tonnes this month (mid-March to mid-April). Before the blockade, NOC was receiving 29,000 tonnes monthly. It said that 21,000 tonnes of fuel entered the country during the period mid-February to mid-March.
  • The Economic Rehabilitation Fund, announced by the government to provide relief to earthquake-hit businesses, is yet to come into operation even though it has already been two months since the working procedure to set up and operate the fund was endorsed by the cabinet.
  • The government is preparing to announce the new budget within the month of May this year. The government is planning to unveil the budget in line with the constitutional provision.
  • Finally, after a long wait, construction works of the Pokhara Regional International Airport would begin from the Nepali New Year. A foundation stone for the construction of the Airport would be laid on April 13. The High Level Support Committee formed for the same held a meeting today and informed it.
  • Experts and traders have said tariff and non-tariff barriers imposed by India have restricted Nepal’s export potential. India is Nepal’s largest export destination, accounting for nearly two-third of Nepal’s trade, and that such trade barriers affect Nepal severely. India has been imposing counter veiling duty (CVD) on Nepali ready-made garments, copper and brass utensils and kattha. It has also imposed quantitative restrictions on vegetable ghee, copper utensil, and acrylic yarn.
  • Prime Minister KP Sharma Oli has directed officials to lift a provision that requires District Development Committees (DDCs) to make Environment Impact Assessment (EIA) mandatory for extraction of sand, soil and boulders from quarries.
  • Agriculture and Water Resources Committee of parliament has drawn the attention of National Planning Commission (NPC) and the Ministry of Finance to at least double the budget for the newly created Ministry of Livestock Development (MoLD). The government has allocated Rs.5.43 billion budget to the ministry which is running seven subsidy programs for farmers. The ministry has set a target to make the country self-reliant on eggs within a year, meat products in two years and milk in three years.
  • National Consumer Forum (NCF) has suggested to the government to form a separate entity under the Department of Supply Management and Consumer Protection (DoSMCP) to oversee distribution of liquefied petroleum (LP) gas. NCF's suggestion has come at a time when Nepal Oil Corporation (NOC) has been drawing flaks from all quarters for its ineffective distribution mechanism which has made LP gas scarce.
  • Nepal Oil Cooperation (NOC) has paid back Rs 2 billion of the debt that it owes to the government. With this total debt that NOC owes to government has been reduced to Rs 7.64 billion.

"This summarized news has been written on the basis of news published on The Kathmandu Post and My Republica during the week"