IMF Suggests Increasing Capital Spending

IMF Suggests Increasing Capital Spending

Dec. 3, 2013, 5:45 p.m. Published in Magazine Issue: Vol: 07 No. -11 Nov. 29- 2013 (Mangsir 14, 2070)

Naoyuki Shinohara, deputy managing director of the International Monetary Fund (IMF), has said Nepal can achieve higher economic growth by increasing capital spending and improving business climate in the country.

Issuing a press statement at the conclusion of his four-day Nepali visit recently, Shinohara said important contribution for higher and sustained growth can be made by raising public capital spending and improving business climate to create an attractive environment for private investment.

During his stay in Nepal, Shinohara held discussions in Nepal on economic and financial issues with President Ram Baran Yadav, Finance Minister Shankar Prasad Koirala and Nepal Rastra Bank Governor Dr Yubaraj Khatiwada.

He was in Nepal to participate in the 49th South East Asian Central Banks (SEACEN) Governors’s Conference and 33rd meeting of SEACEN Board of Governors which concluded on Friday, November 22, 2013, in Kathmandu.

Shinohara also stated that his discussion with Nepali high ranking officials focused on ways to accelerate and sustain growth, and ensure macroeconomic and financial stability in the country.

“I support the authorities which aim to boost the economy’s potential, including taking advantage of the resource inflows from remittances,” he said. He also said upcoming assessment under the Financial Sector Assessment Program (FSAP), which is being jointly conducted by IMF and World Bank, will contribute to mapping out further reform steps.

The IMF has also been supporting Nepal to improve regulation and supervision to ensure financial stability. In the statement, he also suggested that Nepal tightened liquidity conditions to guard against risks of rising inflation and reduce inflation expectations.

He also said existing peg of Nepali rupees to Indian rupees has served as a valuable anchor for macroeconomic policies.

Lauding the progress made so far by Nepal toward achieving goals set under Millennium Development Goals on poverty reduction and on health and sanitation, he pledged to continue IMF’s support to Nepal in policy advice and technical assistance to maintain financial stability and accelerate growth.

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