Finance Minister Paudel Highlights Investment Potential Amid Positive Economic Trends

Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has emphasized that Nepal’s sovereign credit rating reflects a favorable environment for investment. Speaking at a meeting with development partners held at the Ministry of Finance today, Minister Paudel attributed Nepal’s improved economic outlook to political stability brought by the coalition government comprising the Nepali Congress and CPN (UML).

“The formation of the incumbent government has ensured political and policy stability, boosting investor confidence,” he stated. Minister Paudel expressed optimism that this stability would encourage private-sector growth and foreign investment in the country.

Minister Paudel highlighted several factors contributing to Nepal’s strengthening economy, including a better current account balance, increased electricity exports, higher remittance inflows, and a surge in tourist arrivals. However, he cautioned about the need for export diversification to enhance the external sector’s long-term resilience.

Acknowledging the underperformance in capital expenditure in recent years, the Minister pledged to prioritize project quality and increase public investment. “We are addressing challenges in infrastructure development and private-sector investment, focusing on improving project execution and resource utilization,” he said.

Addressing concerns about Nepal’s public debt, the Minister reassured stakeholders that the government is adopting a prudent approach to loan mobilization. A draft policy on assistance mobilization and public-sector finance is underway, aimed at refining fiscal management and attracting development partners’ input.

Nepal’s commitment to balancing its fiscal priorities—such as social security programs and debt servicing—has constrained capital expenditure, he noted. “The ratio of capital expenditure has decreased due to our dedication to essential expenditures, but we are working to streamline resource allocation for strategic projects and enhance revenue mobilization,” he explained.

Minister Paudel underscored the government’s emphasis on climate adaptation and building a green economy. He invited collaboration with development partners to address pressing issues, including climate change and sustainable public investment.

Representatives from development organizations, including the World Bank, the Asian Development Bank, and the United Nations Development Agency, commended Nepal’s economic reforms and expressed readiness to support its development agenda. They also welcomed the establishment of the High-Level Economic Sector Reform Recommendation Commission and noted the positive impact of Nepal’s credit rating on attracting foreign direct investment.

Minister Paudel concluded by affirming Nepal’s commitment to effective collaboration with development partners to achieve sustainable development and long-term economic growth.