April 20: The Confederation of Nepalese Industries (CNI) has stated that the country’s economy is not in crisis.

A study conducted by CNI has concluded that the economy is not in crisis. CNI has also released a study report claiming that the economy is not in crisis. Various economists have also commented that the economy is not in crisis.

There have been comments that the lack of liquidity in the country's banking system, rising trade deficit and balance of payments deficit, declining foreign exchange reserves, rising inflation, and lack of energy and fuel have all contributed to the crisis. Some have even analyzed that Nepal is facing an economic crisis like Sri Lanka. However, according to the CNI report, Nepal's economy is much better than that of Sri Lanka.

CNI claims that data suggest there is no economic crisis. However, the report states that there is a need to move forward with restraint.

At present, the size of Nepal's public debt is 40.5 per cent of the gross domestic product (GDP). Sri Lanka's national debt is 111 per cent of GDP.

Similarly, Nepal has 6.7 months of foreign exchange reserves to support imports of goods and services. Sri Lanka does not have enough foreign exchange reserves to sustain one month of goods and services. Sri Lanka is unable to import even basic commodities.

Inflation in Nepal is 7 per cent while it has grown to 25 per cent in Sri Lanka. In this case, Nepal's economy should not be compared with Sri Lanka, the report said. On top of that, CNI claimed that the overall economy is not in crisis. The report states that the economy does not appear to be in crisis in the last three months of the current fiscal year.

In the first five months of the current fiscal year, the monthly average import was Rs 167 billion. In the following three months it stood at Rs 156 billion in January, February and March. This suggests that imports have declined recently.

Similarly, foreign exchange reserves were negative by 3.24 per cent in the first five months of the current fiscal year. In the following three months, foreign exchange reserves declined by only 1.53 per cent.

The capital budget of Rs 28.40 billion was spent in the first five months of the current fiscal year. After that, a capital budget of Rs. 48.70 billion has been spent in the last three months.

The study also showed that the inflow of remittances has increased in the last three months. In the first five months of the current fiscal year, the monthly remittance was Rs 77.70 billion. In the next three months, remittances have reached an average of Rs 80.80 billion per month.

Similarly, arrival of tourists has also increased in the last three months. The average monthly tourist arrivals in the first five months of the current fiscal year were 17,757. In the next three months, an average of 26,249 foreign tourists arrived monthly.

According to CNI Chairman Bishnu Agrawal, there is no economic crisis in Nepal based on these statistics. However, he acknowledged that the numbers were not enough and we need to be cautious.

CNI made the report public at a press conference on Tuesday.

It has been said that there is an economic crisis in Nepal. But, looking at the statistics, it doesn't look like that. Foreign countries have reserves enough to sustain imports for three months of imports in foreign countries. Even though we have enough reserves to support imports for more than six months, there are comments that there is an economic crisis, which is not true," Agrawal opined. 

At the same time, the steps taken by the government to resolve the crisis have created more problems, he added.

CNI concluded that stopping imports is not the answer. It has been said that a special initiative should be taken to increase production, marketing and consumption of domestic goods by managing the import at present. Stating that Nepal is in an economic crisis could create panic and destabilize the market, shared CNI Vice President Anuj Agrawal.