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Budget Deficit Increases

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August 28: The budget deficit of the government has increased one and a half times in fiscal year 2016/17 as compared to the previous year. The budget deficit in fiscal year 2015/16 was Rs 49.83 billion. However, the budget deficit rose to Rs 75.78 billion. The total budget deficit has reached Rs 125.61 billion, according to the latest financial report unveiled by Nepal Rastra Bank.

Economists say that the rise in budget deficit could be counter-productive for the government. Economist Prof Dr Madan Dahal says that least developed countries have no options other than to face budget deficit. He opined that a budget deficit of more than 1 percent of the gross domestic product (GDP) would have negative impact in the overall economy.

Statistics show that Nepal’s budget deficit was 4.8 percent of the GDP in last FY.

“Statistics have shown that inflation is under control. But that is not the reality. It’s all because the supply has increased,” said Dahal.

The government had spent only Rs 793 billion out of the total budget of Rs 1048 in the last fiscal year.

The government had raised internal loan of Rs 88.34 billion in fiscal year 2016/17 to meet the budget deficit.

 

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