macro case

7/31/2019 Macro Case

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DOCKING NEPALS

ECONOMIC ANALYSISNEPALECONOMICFORUM (JUNE 2012)

Presented by:

Shubhekchha Neupane


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INTERNATIONALECONOMY

Nokia in trouble

(first quarter operating loss of 1.7 billion)

Gold price increase

(price surged past US dollar 1,600)

Dollar raises against the rupees

(outflow of capital from India)

India cuts interest rates

(cut half a percentage for the first time in three years)

China moves towards currency liberalization

(loosening the trading bond limits for Yuan)


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According to the International Monetary Fund (IMF)

world GDP is set to rise by 3.5% this year and by

4.1% in 2013.

Nepal will be able to enjoy the trickle down effects

of economic growth - specially from increasing

labor demand.

Other than from remittance Nepals link to the

global economy is limited.

The slowing down of the Indian and Chinese

Economies suggest that the future holds challenges

for the Nepalese economy.


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ACCORDINGTO CENTRAL BUREAUOF STATISTICS

(CBS)

GDP for fiscal year 2000/01 : NPR 413 billion

GDP for fiscal year 2010/11 : NPR 637 billion

Gross National Income in 2000/01 : NPR 19,144

Gross National Income in 2010/11 : NPR 46,859


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CASE ANALYSIS


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AGRICULTURE

The agricultural budget increased by 17.87% to

NPR 384.9 billion.

NRB made it mandatory for banks and financialinstitutions to ensure that the agriculture sector

accounts for at least 10% of total lending by July

2014


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EDUCATION

Fee ceiling set for private schools

Campaign of proving primary education to all

children by 2015

Vocational subjects soon to be an integral part of

school education.


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ENERGY

For the fifth time in current fiscal year, there has

been a hike in the price of petroleum products.

According to NOC, approximately 531 megawatt ofelectricity is generated through the use of diesel.

LGP Consumer Cards issued.


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FOREIGNAID

Japan provides grant of NPR 580 million for theSindhuli Road Project.

Germany pledged NPR 1.06 billion towards health

sector reforms.

Nepal is likely to lose at least NPR 430 million in

annual aid assistance from Canada.

ADB to assist in urban development (NPR 931

million)


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HEALTH

School Health and Nutrition Project gains ground in

VDCs (546 primary schools in 60 VDCs)

No polio detected in Nepal for 20 months

Health ministry to table human resource plan)


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TRADE

Nepal dropped 21 places in the last five years inGlobal Logistics Performance Report.

Trade deficit stands at USD 3.2 billion

Decrease in the import of high value goods such as

vehicles, cement, rods, etc

Increase in the import of low value goods such as

food, readymade garments and luxury items such

as shoes.


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REMITTANCE

In the period of 7 months, starting from September

2011, Nepali insurance companies have sold

insurance policies worth NPR 594.1 million.

Migrant workers number increase almost 19%

compared to last year.

Worker demand more than supply.


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CONCLUSION


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Agriculture

To protect local farmers the government also needs to

implement strict measures when it comes to informal trade ofagricultural commodities.

Education

The government is seeking to improve education levels throughits school enrollment programs while increasing the impact of

education by improving the quality of education through

education in mother tongue.

EnergyAlternative and renewable sources of energy such as biogas,

solar energy and wind must be looked into to arrive at a long

term solution for the country.


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Health

Nepal continues to show improvement in most of its health

indicators with the exception of neo natal mortality.

Foreign Aid

Aid effectiveness continues to be ineffective due to a lack of

transparency in the flow or distribution of foreign aid.It is necessary to internalize international tools like the

International Aid Transparency Initiative (IATI) to ensure financial

transparency.

TradeIf Nepal is to increase its global competitiveness and integrate into

the world economy , it needs to focus on creating the right policies

and infrastructure.


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Remittance

In the long run a remittance dependent economy will be

dependent on the success of other economies.

Indirect benefit of remittance includes increase in business for

insurance companies; increase in financial service agencies. It

leads to increase in liquidity and in turn improving access to

capital in Nepal.


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THANKYOU!!!

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