April 6: Finance Secretary Toyam Raya insists that revenue collection is improving despite the internal pressure of the economy. During a program organized on Wednesday to unveil the Nepal Development Update (April 2023), Secretary Raya claimed that the revenue collection, which was sluggish since the first month of the current fiscal year, has been improving.

He said that further improvement in revenue collection is expected.

“This year, there has been improvements in tourism, agricultural remittances and hydropower sectors, which will make the economy vibrant,” said Raya,  adding, “There is still financial pressure internally. However, I believe that the country can stand strong against this challenge.”

In the program, Faris Hadad-Zervos, country director of the World Bank for Nepal, Sri Lanka and the Maldives said that there has been a slowdown in industrial production in all the countries of South Asia.

India's manufacturing sector also shrunk by 2 percent between June and December last year, according to the World Bank's South Asia Economic Focus. Sri Lanka, Bangladesh and Pakistan received help from the International Monetary Fund (IMF) to solve the problems of the external sector. He said that the IMF program is also under discussion in Nepal.

Prof Dr Shiva Raj Adhikari, head of the economics department of Tribhuvan University said that Nepal needs policy changes to tame inflation, weak capital expenditure and other systemic challenges.

Barsha Shrestha, head of ICRA Nepal said that in order to improve the current economic situation, Nepal needs to make timely changes in its economic policies.

According to the semi-annual 'Country Update' of the World Bank, the economic growth rate of Nepal this year is going to be lower than previously projected. The 'Nepal Development Update (April 2023): Fine-Tuning Policy in a Turbulent Environment' predicts that Nepal's economy will grow by 4.1 percent in the fiscal year 2023, which is less than the estimate of October 2022.

In the Fiscal Year 2023/24, the growth rate is expected to increase to 4.9 percent due to the revival of the tourism sector, increase in remittance inflow and gradual easing of monetary policy. Inflation in South Asia is expected to drop to 8.9 percent this year and to fall below 7 percent in 2024.