Economic problems will be resolved through monetary policy: Finance Minister Mahat
Finance Minister Dr Prakash Sharan Mahat has said the current economic problems could be resolved through the monetary policy instead of the fiscal policy.
Initiatives would be taken to resolve the problems through the monetary policy as the government lacks options to run the fiscal policy, he said while addressing the Nepal Trade Summit-2023 here today organised by the Confederation of Commercial Banks and Financial Institutions Nepal (CBFIN).
“The implementation of the fiscal policy could not increase. We are unable to flow capital through the fiscal policy. We lack resources to increase fiscal spaces.”
The government is not in a situation wherein it can do work through the fiscal policy as the revenue collection is very low, he said. “Time has come to work for achieving common goals and objectives of coordination. The Nepal Rastra Bank is at work to review the fiscal policy towards mid-May. Bank interest rates could be reduced through monetary equipment. We must focus on creating a climate of investment by decreasing interest rates through monetary equipment.”
The government could not effectively spend development budget in time, he admitted. Saying economy could not be dynamic due to failure to increase capital expenditures, resulting in low revenue collection, he stressed the need for creating a mechanism that would ensure capital expenditures since the very beginning of the next fiscal year, 2023/24.
“Now, it seems economy is weak and in problems. Internal trade and business is weak. Inflation is under control. But, there are problems. Industries and trade are in problems due to bank interest pressure. Revenue collection is not satisfactory as well,” he said.
Stating that the government’s efforts alone could be enough, he called for all sectors to come together for economic improvements.