Newly appointed Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has announced that the government will concentrate on restoring confidence among both the general public and the private sector. During a meeting with the Federation of Nepalese Chambers of Commerce and Industry on Wednesday, Minister Paudel acknowledged that there are many economic problems to tackle, but he stressed that the top priority is to rebuild trust within the private sector.
In his discussion with the leaders of the Federation of Nepalese Chambers of Commerce and Industry, Deputy Prime Minister Paudel encouraged business leaders to continue their work without fear. He acknowledged that there has been a drop in market demand, production, and exports but assured that there are solutions to these challenges. He reaffirmed the government’s commitment to resolving issues such as the dedicated feeder and trunk line concerns and delays in payments to construction contractors.
Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry, spoke about the current economic struggles and emphasized that economic recovery depends on improving private sector morale. He called for better cooperation between the government and private sector to boost the economy.
Dhakal informed Deputy Prime Minister Paudel that there is a lack of coordination among economic bodies and suggested that an economic reform commission or similar body with private sector involvement could help improve the economic situation.
He also urged Minister Paudel to quickly address the dedicated feeder and trunk line issues, which have been severely affecting industrial operations and causing a reduction in manufacturing activities.
Dhakal pointed out that the economic downturn has also led to fewer job opportunities. He mentioned that, while data from Nepal Rastra Bank shows inflation at 4.17%, the real inflation rate has been around 7% since the Covid pandemic. This rising inflation has reduced people’s purchasing power and decreased market demand. Dhakal urged Minister Paudel to introduce policies that will stimulate market demand and revitalize economic activities.
Additionally, Dhakal highlighted that even though loan interest rates have dropped, entrepreneurs are still reluctant to invest. He explained that the money brought in through remittances is accumulating in banks rather than being invested, showing that low interest rates alone are not enough to encourage investment.
He also noted that both established businesses and new entrepreneurs are hesitant to invest due to past policy failures. Dhakal called on Minister Paudel to create a more investment-friendly environment through effective policy reforms.
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