Top Economic news for this week- 27th Chaitra to 3rd Baisakh

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Baisakh 4, 2072- This week's main events that provide insight into current Nepalese economic environment have been briefly presented below:

  • Nepal received investment commitments worth Rs. 7.94 billion from the British Virgin Islands (BVI) over the last 22 years, including commitments worth Rs. 2.26 billion in 2070 BS alone. Government agencies here are clueless about the details of any real investments from BVI.
  • Nepal Rastra Bank (NRB) has put on hold its plan of issue NRB Bonds that it had planned earlier to absorb excess liquidity in the banking system. In the Monetary Policy for Fiscal Year 2015/16, the central bank had announced that it would issue NRB Bonds if need arises.
  • Private sector leaders have urged the government to make amendments to Black-marketing and Some Other Social Offenses and Punishment Act 2032, stating that the law is outdated and not private sector-friendly. In addition to that, the private sector has also criticized the government for giving more priority to a controlled economy and accused it of neglecting the concept of free market economy.
  • Deputy Prime Minister and Minister for Energy Top Bahadur Rayamajhi on Saturday said that power cut will be reduced significantly from mid-April. Speaking at an interaction organized at the Reporters’ Club in the Capital, he claimed that load-shedding will end within two years.
  • Entrepreneurs and clean energy-related institutions have started promoting the use of lithium (lithium iron phosphate -LiFePO4) battery technology in electric vehicles (EV) a majority of which use lead acid batteries in Nepal.
  • Rounds of negotiations between Nepal Electricity Authority (NEA) and China Three Gorges Corporation (CTGC) failed to set up a joint venture company to build the West Seti Hydropower Project in Seti River. The negotiations were expected to prepare a mutually-agreed on document of about 40 pages for setting up a company and the plan was that the same would be signed during Prime Minister K P Sharma Oli's China visit. But it failed to materialize.
  • The Agriculture Development Ministry has proposed a programme of the fiscal year 2016/17 with the target of establishing 185 super zones for the development of agriculture sector in all seven provinces.
  • Nepal's economic growth has been stalled due to devastating earthquakes as well as significant cross-border trade disruptions in the second half of the calendar year, according to the World Bank. The incidents imposed a severe toll on economic activity, the World Bank said in its report 'South Asia Economic Focus' which has projected economic growth to slow down to 1.7 percent in the current Fiscal Year 2015/16.
  • The Parliamentary International Relations and Labour Committee on Sunday directed the Tourism Ministry to furnish an acceptable explanation for the delay in acquiring Chinese aircraft. The ministry has been given 15 days to submit its explanation. The planned procurement of four Chinese-made aircraft an MA60 and three Y12e has been put on hold for more than a year after Nepal Airlines Corporation (NAC) reported many problems with the planes delivered in 2014. On November 29, 2012, NAC and AVIC International Holding Corporation, the supplier of the problem-plagued MA60 and Y12e aircraft, had signed a commercial agreement for six aircraft.
  • Nearly a year after devastation by the Gorkha earthquake, the National Reconstruction Authority is set to engage non-government organizations in rebuilding houses. The NRA had temporarily barred the NGOs from helping families reconstruct their homes.
  • Nepal Tourism Board (NTB) on Monday announced Bikram Sambat 2073 as 'Ghumphir Barsa', which means travel year, in a bid to promote domestic tourism. The initiative is part of the government's preparations to organise International Tourism Year 2017-18.
  • Department of Money Laundering Investigation (DMLI) and Metropolitan Police Crime Division of Nepal Police have signed a memorandum of understanding (MoU) to forge effective coordination in controlling flow of dirty money.
  • Bhairahawa has been turning into one of the country’s main transit points as many traders have been bringing their shipments through this trade hub on the southern border after the Birgunj customs point was choked by the recent trade embargo by India.
  • The state-owned Nepal Oil Corporation (NOC) has lately been dillydallying in implementing the Automatic Fuel Pricing Mechanism (AFPM) — the mechanism that demands automatic adjustments in fuel prices in line with international fuel prices.
  • The 53rd report of the OAG unveiled on Monday has pinpointed a number of spending and other measures by government agencies that are not transparent, including the spending of Rs.25.55 billion in technical assistance, the tax waiver allowed for the import of different goods, and spending on preparations for the 18th SAARC summit as well as on disaster response. In addition to that, The Office of Auditor General (OAG) said that two profit-making private hospitals received grants from the government even though they have not renewed their permits.
  • Central Finance Ltd and Bhaktapur Finance Company Ltd have signed a Memorandum of Understanding (MoU) for merger. They have jointly applied to the Nepal Rastra Bank (NRB), seeking the central bank's go-ahead for the merger.
  • Swedish company TeliaSonera has announced completion of the divestment process of its shareholdings in Ncell to Malaysian company Axiata.
  • After drawing criticism from the private sector for the government's failure to create business doing environment in the country, Prime Minister KP Sharma Oli on Tuesday said that the government was committed to support agendas and plans of the private sector.
  • The Karnali River Control Project lies dead because it has no project head. The post of project head has remained vacant for more than two months, and there is no one to carry out administrative and embankment related tasks at the project based in Rajapur in western Nepal.
  • A couple days after the World Bank cut Nepal's economic growth forecast for Fiscal Year 2015/16 to 1.7 percent, International Monetary Fund (IMF) has even lowered the growth forecast to 0.5 percent.
  • Prime Minister KP Sharma Oli said that the government would lobby the US government to gain duty-free, quota-free access to the American market for all types of readymade garments. He also urged garment makers to expand their production capacity to ensure regular supplies to one of the main export destinations.
  • An electronic procurement system based on single portal has been launched in the country for the first time aimed at making procurement process objective, transparent and convincing.
  • Remittance inflows to Nepal rose sharply immediately after the Gorkha Earthquake as migrant workers rushed money to their families for living expenses and rebuilding destroyed homes, a World Bank report said. According to the report entitled Migration and Remittances Recent Developments and Outlook, remittance surged 20.9 percent to $6.6 billion in 2015, basically to finance daily needs and to deal with the effects of the disaster. The growth rate of remittance in 2014 was 3.2 percent.
  • The parliamentary Agriculture and Water Resources Committee has directed the Ministry of Agricultural Development to take urgent action to increase food production amid worries about growing food insecurity and an alarming import bill.
  • Department of Food Technology and Quality Control is considering amendment to the existing Food Act which envisages raising the cash penalty against businesses involved in malpractices by up to 20 times. The penalty currently ranges from Rs1,000 to Rs100,000 based on the nature of the misconduct.
  • The Lower Modi Hydroelectric Project is expected to come online this October after its construction work was held up for more than six months due to various problems.
  • Despite weak macroeconomic indicators, the capital market had a bull run in 2072 BS. The Nepal Stock Exchange (Nepse) closed the last Nepali calendar year 444.5 points higher.

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