India, Nepal, and Bangladesh inked an agreement on Thursday 3rd October to trade electricity.
The first of its kind deal was signed in Kathmandu, allowing Nepal to sell electricity to a third country. Nepal’s energy trade was previously taking place only with its southern neighbor, India.
The agreement was signed by officials of the Nepal Electricity Authority (NEA), India’s National Thermal Power Corporation and Bangladesh Power Development Board.
The agreement was signed by Kulman Ghising, executive director of the Nepal Electricity Authority; Mohammad Rezaul Karim, chairman of Bangladesh Power Development Board; and Renu Narang, CEO of India’s NTPC Vidyut Vyapar Nigam amid a function in Kathmandu.
Energy Minister Deepak Khadka; Minister of State for Energy Purna Bahadur Tamang; and Bangladeshi Minister for Forest, Environment, Climate Change, and Water Resources Syeda Rizwana Hasan witnessed the signing.
As per the agreement, Bangladesh will now import 40 megawatts of electricity from Nepal. The Indian side has also been involved as Nepal’s electricity will be transmitted to Bangladesh through the transmission infrastructure on the Indian territory. Nepal and Bangladesh are not territorially linked.
Nepal is expected to sell 144,000 MWh (megawatt-hour) of electricity in five months—mid-June to mid-November—every year at the rate of 6.4 US cents a unit.
As per word bank Nepal Development update 024 Nepal’s real GDP growth is projected to accelerate to 5.1 percent in FY25 and 5.5 percent in FY26. Wholesale, retail, construction, and manufacturing sectors- that collectively account for over one-fifth of GDP-are poised to benefit from the NRB’s loosening of monetary policy and easing of regulatory requirements, including the relaxation of working capital requirements, easing of loan classification and loan- loss provisioning for businesses that continue servicing loans despite closures due to unforeseen circumstances. These measures are expected to stimulate private investment, while remittance-driven private consumption and increased exports of hydropower and tourism are anticipated to further bolster economic growth.
Nepal’s real GDP growth accelerated to 3.9 percent in FY24, up from 2 percent in FY23. The services sector was the key driver, fueled by a 30.7 percent surge in tourist arrivals, which boosted activities in transportation, accommodation, and food services. Increased hydropower production, by over 450 MW, plus a 4.3 percent rise in paddy production also contributed to the growth.
The current account surplus is expected to narrow as the trade deficit widens. This widening will stem from a rise in both merchandise and service imports.
International remittances plays a significant role in Nepal’s economy, affecting household consumption, poverty reduction, and human capital development. There is also a risk that economic growth could slow if there is a shock in migrant-receiving countries.
While the medium-term outlook for Nepal remains positive, it is subject to several downside risks.
Based on Nepal Living Standard Survey-IV 70.6 percent of households are within 30 minutes of a Health Post, while 62.1 percent have access to a Basic or Urban Health Centre. Only 44.9 percent of households are within 30 minutes of a Primary Health Centre, and 46.5 percent can reach a Government Hospital within the same time. Access to private health facilities is notably higher, with 80.6 percent of households within 30 minutes of a Private Clinic and 56.1 percent within reach of a Private Hospital. Community hospitals are less accessible, with only 32.9 percent of households nearby.
Similarly, there are significant variations in access to health facilities across different provinces. Bagmati and Lumbini provinces stand out with high accessibility, with 78.0 percent and 78.5 percent of households, respectively, being within 30 minutes of a Basic Health Centre and over 75 percent having access to a Health Post. Madhesh province shows notable access to private health facilities, with 87.6 percent of households within reach of a Private Clinic and 69.4 percent of a Private Hospital. Conversely, Karnali province has the lowest access, with only 43.1 percent of households near a Basic Health Centre and just 11.0 percent near a Primary Health Centre. Sudurpaschim province a has comparable limited access levels. Source (NLSSIV)
The role of private investment remains crucial for stimulation growth and employment of a country. Foreign Direct Investment (FDI) is regarded as an important source of external financing in recent years. FDI plays a key role in widening the sources of financing and crowding in domestic investment in countries like Nepal that have financing constraints. Nepal has introduced legal, institutional and regulatory reforms in recent years to attract FDI inflows.
Nepal Rastra Bank (NRB) has conducted a survey to analyze the trend of FDI inflows and existing FDI stock in Nepal. The survey updates and compiles FDI stock by counterpart economies and economic activities. The survey provides comprehensive information on face value of foreign liabilities of Nepalese companies arising on account of FDI. The statistics provided by the survey are used as inpurts in the compilation of Balance of Payment (BoP) and international Investment Position (IIP) of Nepal.
The survey covers 197 firms out of 604 companies that have taken FDI approvals from NRB at the end of 2020/21. The survey shows stock of FDI in Nepal increased by 14.8 percent to Rs. 227.9 billion at the end of 2020/21. Paid-up capital is the major component in FDI stock as it accounts for 53.9 percent of total FDI stock whereas the reserves and loans in total FDI stock accounts for 31.6 percent and 14.5 percent respectively.
The survey says Nepal has received foreign investment from 55 different countries as of mid-July 2021. In terms of total FDI stock, India ranks top position with Rs. 75.8 billion followed by China (Rs. 33.0 billion), Ireland (Rs. 16.5 billion), Singapore (Rs. 15.5 billion) and Saint Kitts and Nevis (Rs. 14.5 billion).
Industrial sector accounts for about 60.5 percent of total FDI stock. Electricity, gas, stem and air conditioning sector constitutes 30.8 percent out of the industrial sector. Similarly, manufacturing sector constitutes 29.5 percent and service sector constitutes 26.9 percent. According to the survey, hydropower sector has been preferred sector for FDI in recent years. 30.8 percent of FDI stock and 40 percent of total paid-up capital is in this sector.
The survey report presents the latest data of FDI stock in Nepal and provides the estimates of inward direct investment position or the FDI stock at book value and country-wise as well as sector-wise distribution of FDI stock at the end of 2021/21.
Election Commission has announced House of Representatives and Provincial Assembly elections date for Mangsir 4 2079 (20 Nov 2022). A total of 17988570 voters will be eligible to vote on the announced date. Among the total voters 8847579 female, 9140806 male and 185 others will be eligible to vote on the day. 10891 voting stations and 22226 polling centers have been approved by the election commission for the November polls.
According to Election Commission Morang district has the highest number of voters i.e. 735525 followed by Jhapa (663311) and Kathmandu (652126). Similarly, lowest number of voters are found in Manang district (6779) followed by Mustang (10957) and Dolpa (22774).
Among the provinces Bagmati Province has the highest number of voters (3471492) and Karnali Province has the lowest number voters (1008403).
The country’s inflation will likely marginally decline to 6.1% in FY2023 from 6.3% in FY2022, restrained by tight monetary policy, a normal harvest, somewhat subdued oil prices, and a modest inflation decline in India.
The current account deficit is estimated to narrow to 8.1% of GDP in FY2023 owing to a moderation in merchandise imports amidst stable remittance inflows. Out-migration for foreign employment has picked up, exceeding the pre-pandemic level of FY2019. Imports related to COVID-19 will have substantially decreased and falling oil prices will help lower import bill for Nepal.
The government’s fiscal policy reflected in the budget speech for 2023 is somewhat expansionary, focused on strengthening agriculture, industry, infrastructure, and social protection. Monetary policy is contractionary, aimed at curbing high credit growth to contain domestic demand, escalating prices, and rising imports.
The country’s inflation will likely marginally decline to 6.1% in FY2023 from 6.3% in FY2022, restrained by tight monetary policy, a normal harvest, somewhat subdued oil prices, and a modest inflation decline in India.
The current account deficit is estimated to narrow to 8.1% of GDP in FY2023 owing to a moderation in merchandise imports amidst stable remittance inflows. Out-migration for foreign employment has picked up, exceeding the pre-pandemic level of FY2019. Imports related to COVID-19 will have substantially decreased and falling oil prices will help lower import bill for Nepal.
The update highlights that agriculture growth will likely be boosted owing to a normal monsoon, but the ongoing fertilizer shortages may adversely affect paddy production. Industry is expected to grow on increased generation of hydroelectricity and capacity utilization of industries. The report also notes that services growth will likely moderate owing to a slowdown in real estate, wholesale, and retail trade activities, induced by credit control measures and hike in interest rates. But provincial and federal level elections scheduled in November 2022 will stimulate spending supporting GDP growth.
The government’s fiscal policy reflected in the budget speech for 2023 is somewhat expansionary, focused on strengthening agriculture, industry, infrastructure, and social protection. Monetary policy is contractionary, aimed at curbing high credit growth to contain domestic demand, escalating prices, and rising imports.
The country’s inflation will likely marginally decline to 6.1% in FY2023 from 6.3% in FY2022, restrained by tight monetary policy, a normal harvest, somewhat subdued oil prices, and a modest inflation decline in India.
The current account deficit is estimated to narrow to 8.1% of GDP in FY2023 owing to a moderation in merchandise imports amidst stable remittance inflows. Out-migration for foreign employment has picked up, exceeding the pre-pandemic level of FY2019. Imports related to COVID-19 will have substantially decreased and falling oil prices will help lower import bill for Nepal.
Nepal’s economy is estimated to modestly expand by 4.7% (at market prices) in fiscal year (FY) 2023, down from an estimated growth of 5.8% in FY2022, says an update of the Asian Development Outlook (ADO) 2022, the flagship economic publication of the Asian Development Bank (ADB). Gross domestic product (GDP) growth is forecast to moderate largely reflecting the tight monetary policy for FY2023, necessary to stem the rise in imports, a marked decline in foreign exchange reserves, and inflationary pressure.
The update highlights that agriculture growth will likely be boosted owing to a normal monsoon, but the ongoing fertilizer shortages may adversely affect paddy production. Industry is expected to grow on increased generation of hydroelectricity and capacity utilization of industries. The report also notes that services growth will likely moderate owing to a slowdown in real estate, wholesale, and retail trade activities, induced by credit control measures and hike in interest rates. But provincial and federal level elections scheduled in November 2022 will stimulate spending supporting GDP growth.
The government’s fiscal policy reflected in the budget speech for 2023 is somewhat expansionary, focused on strengthening agriculture, industry, infrastructure, and social protection. Monetary policy is contractionary, aimed at curbing high credit growth to contain domestic demand, escalating prices, and rising imports.
The country’s inflation will likely marginally decline to 6.1% in FY2023 from 6.3% in FY2022, restrained by tight monetary policy, a normal harvest, somewhat subdued oil prices, and a modest inflation decline in India.
The current account deficit is estimated to narrow to 8.1% of GDP in FY2023 owing to a moderation in merchandise imports amidst stable remittance inflows. Out-migration for foreign employment has picked up, exceeding the pre-pandemic level of FY2019. Imports related to COVID-19 will have substantially decreased and falling oil prices will help lower import bill for Nepal.
