Top Economic news for this week – 18th Baisakh to 24th Baisakh

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Baisakh 25, 2073- This week's main events that provide insight into current Nepalese economic environment have been briefly presented below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • The Ministry of Physical Infrastructure and Transport has asked the government for additional funding of Rs5 billion for the under-construction postal highway even though the project has been making very slow progress.
  • The civil contractor of Kankai Bridge in Bhadrapur of Jhapa has gone out of contact for the past 12 months, leaving the project midway, according to a monitoring report prepared by the parliament's Development Committee. The report, which was released on Friday, recommends to the government to take action against Pappu Construction, the civil contractor of the bridge (723m). The project, which started in June, 2011, was scheduled to be completed by June, 2013.
  • Eighty-five per cent of the construction works have completed at the Upper Madi Hydroelectricity Project at Sildujure VDC of Kaski district.
  • Vehicular movement on the Arughat-Gorkha Bazaar road has come to a complete halt for the past week due to a dispute between Transportation Entrepreneurs Association and Arughat Yatayat Pvt Ltd. The dispute ensued after the syndicate barred Arughat Yatayat from running busses on the route. Political parties meant to solve local disputes through coordination are instead in favour of the syndicate system, the company said, accusing local political leaders of attempting to legalise the syndicate system.
  • The government is planning a move to stabilize the price of sugar in the market. Plan is afoot to allow Salt Trading Corporation (STC), the state-owned trading company, to import sugar immediately for stabilization of price in the short-run and also ensure smooth supply of sugar in the long-run, according to government officials.
  • With more Kathmanduites eating organic foods and knowledge about stores selling them spreading, sales of products made without the use of chemical inputs have swelled in the valley. The growing market for organic products has also encouraged traders from Canada and the US to team up with local vendors to hold Farmers’ Markets.
  • Tea exports dropped 1.13 percent in the last fiscal year despite a significant growth in the plantation area and volume of production. Nepal exported tea worth Rs2 billion in 2014-15 compared to Rs2.02 billion in the previous year, according to National Tea and Coffee Development Board. During the period under review, the production was recorded at 23,186 tonnes, up from Rs.21,076 tonnes. The plantation area to increased to 26,165 hectares from 20,120 hectares.
  • Manufacturer of electric rickshaws Hulas Motors has said that the government’s decision to exempt imports from value added tax (VAT) has hurt the production of its battery-operated vehicles which have become extremely popular in the Tarai. The government has waived VAT on imported rickshaws leading to a surge in shipments.
  • Economists have suggested that the government address persistent under disbursement of allocated budgets, improve tax administration and compliance, and accelerate reconstruction activities through issuance of reconstruction bond. Speaking at a function organized to unveil the report of 'Economic and Social Survey of Asia and the Pacific 2016' produced by United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in Kathmandu on Monday, they advised the government for maximum utilization of domestic resources in increasing productivity as the Official Development Assistance (ODA) from rich countries have been drying for various reasons.
  • Nepal-China Chamber of Commerce and Industry (NCCCI) have urged the Chinese government to reopen the Tatopani border point and bring the trade route into operation permanently.
  • Commercial banks have added Rs 159.7 million worth of loans against credit cards in the first eight months of the current fiscal year. The total deft against the security of credit cards as of mid-March stands at Rs.584.6 million, according to Nepal Rastra Bank (NRB). While the overall lending slowed down in recent months amid devastating earthquake and Tarai turmoil, banks have increased their loans against credit cards.
  • Amid controversy over whether Swedish-Finnish telecom operator TeliaSonera, which sold Ncell to Malaysia’s Axiata, has to pay capital gains tax (CGT) to the government, Ncell has applied with the Department of Industries (DoI) to raise its authorised capital. Ncell has submitted a proposal to DoI to increase its capital to Rs.155.33 billion from Rs.17 billion, according to a highly-placed government source. “Discussions are under way at the department and the Industry Ministry, and officials are not sure whether to move ahead with the proposal.”
  • Government officials and consumer right activists have warned consumers against hoarding petroleum products, stating that it creates artificial shortage in the market and increases fire risk.
  • Average daily turnover at Nepal Stock Exchange (Nepse) has almost doubled following the full-fledged enforcement of Central Depository System (CDS). The average daily turnover, which was around Rs 320 million in April last year, has now increased to around Rs 900 million in recent weeks. The daily turnover often reaches Rs.1 billion these days.
  • The economic growth for the current fiscal year has sqeezed to almost zero, according to the Central Bureau of Statistics (CBS). Releasing the gross domestic product estimate for the current fiscal year on Tuesday, the CBS said that the economy will grow by just 0.77 percent — which is a 13-year low — in the current fiscal year. In the fiscal year 2001/02, the country had recorded economic growth of 0.16 percent. Likewsie, the CBS has also revised last fiscal year's economic growth downward to 2.32 percent from the estimation of 3.04 percent.
  • A high-level government body has directed Ministry of Labor and Employment (MoLE) to prepare labor pool across the country to facilitate reconstruction activities. The meeting of National Development Action Committee (NDAC), led by Prime Minister KP Sharma Oli, on Wednesday held discussion on the availability of laborers for reconstruction works so that quake survivors do not feel shortage of trained hands to rebuild their house by using housing grant announced by the government.
  • Nepal Rastra Bank (NRB) Governor Chiranjibi Nepal has warned that another financial crisis might come at any time. Speaking at a program in capital on Wednesday, Nepal underlined the need for cooperation among all stakeholders to ward off the crisis. He also said that the earlier financial crisis should help us learn lessons for avoiding repetition of mistakes. "Haphazard lending in real estate and housing sector earlier led to the financial crisis," said Governor Nepal. "We should move ahead by learning lessons from that crisis."
  • In a bid to address perennial shortage of Liquefied Petroleum (LP) gas in the market, the government has decided to build LP gas storage facilities in the country capable enough of meeting demand of at least four months.
  • The 13th Handicraft Trade Fair and 11th Craft Competition kicked off at Bhrikuti Mandap Exhibition Hall from Thursday. The event is being organized by the Federation of Handicraft Association of Nepal (FHAN).
  • The central bank's cost to manage liquidity surplus jumped by nearly 245 percent in the first eight months of the current fiscal year 2015/16 compared to the amount that it spent in the last fiscal year. Nepal Rastra Bank spent a total of Rs.658.2 million to mop up Rs.469.37 billion over the period of eight months in the current fiscal year. The central bank had spent Rs.190.6 million in 2014/15 to absorb Rs.476.8 billion.
  • The government is declaring the next decade as a 'Decade of Economic Growth' in the budget for the next fiscal year. Tabling the government's principles and priorities of the budget for the next fiscal year in the parliament on Thursday, Minister for Finance Bishnu Poudel said that the government will declare the next decade as the 'Decade of Economic Growth'.
  • Nepal Stock Exchange (Nepse) index fell 11.34 points this week to close at 1,463.13 points on Thursday — the last trading day of the week. The stock market, which was on a bull run for the past few months, declined this week, as investors turned wary of this week's political developments. Stock market observers say that the market reacted to the political uncertainty this week which almost toppled the ruling coalition led by CPN-UML.
  • Petroleum dealers have appealed to the government and consumers to not point fingers at them for all the anomalies in petroleum sector. Speaking at the 39th annual general meeting and 15th national convention of Nepal Petroleum Dealers National Association (NPDNA) in Kathmandu on Friday, they expressed dissatisfaction over black-market charges leveled on them.
  • The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Human Resource Society of Nepal have joined hands to carry out human resource needs survey. The society is a forum of HR professionals in Nepal. An executive board to be formed will work out the modality of surveys and further action plans will be formulated to respond the needs of enterprises, the two organizations said in a statement after signing the Memorandum of Understanding (MoU) for the survey on Friday.
  • Apple crops in Jumla have been insured for the first time allowing farmers to receive compensation should their harvests fail due to bad weather. Weather Index Insurance, a new insurance plan designed to protect farmers, was launched by Sikhar Insurance in association with Sakchyam, an access to finance initiative funded by UK Aid.

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