International Monetary Fund held a press conference  on 22nd April, 2017 regarding their remarks on future plans for Asian countries. 

Kenneth Kang, Deputy Director of Asia and Pacific Department addressed questions related to Nepal's economic growth, decline in remittance inflow and climate change as follows:

YAN: "We have questions on Nepal. So the questions are first, the IMF has made a forecast of 5.5 percent growth for Nepal.  What do you think needs to be done for sustainable growth for Nepal?

Secondly, what is the impact of decline in remittances inflow to countries like Nepal due to slower growth in Gulf region? And relatedly, one of the major threat for the economic growth in low-income countries like Nepal is climate change and other natural disasters.  What should be done to minimize impact of such disasters in the economy?"

KANG: "Okay. I'll take the question on Nepal. I think that we are seeing signs that Nepal is enjoying a broad-based recovery.  And we have growth projected around 5.5 percent for both this year and next following a slowdown caused both by the 2015 earthquake, but also by the trade disruptions along the southern border.

In terms of the priorities looking ahead, I would cite four. First, fiscal policies should be oriented to facilitating as quickly as possible the post-earthquake infrastructure and reconstruction spending.

Second, monetary policy needs to be tightened in order to better support the exchange rate pay and to improve competitiveness by closing the inflation gap with India.

Third, there is concerns about the rapid growth of credit in the economy. And there is a need to accelerate financial sector reforms and supervision through better loan classification and provisioning practices.

On the topic of what Nepal should do to address the risks of climate change and other external shocks, I think here there is a strong case for structural reforms, both to unlock the economy's potential, and to diversify its export base. But also to strengthen the infrastructure system particularly in transportation as a way to improve the domestic business environment. 

These will all help to produce robust growth and give the country the buffers it needs to adjust smoothly to these shocks."

With the election coming near, it is crucial for government bodies to take these points into consideration to meet the targets set by IMF for Nepal. 

Interview Source: imf.org