budget size cut by 14% as current fiscal’s economic growth target unlikely to be achieved

KATHMANDU: The current fiscal year’s budget size has been reduced by the new government, led by Deputy Prime Minister and Finance Minister Bishnu Paudel. The budget, originally presented by then finance minister Janardan Sharma at Rs 1.793 trillion, has been decreased to Rs 1.549 trillion.

Finance Minister Paudel announced the budget reduction while presenting the mid-term budget review report in the House of Representatives on Sunday.

He stated that the target of 8% economic growth set for the current fiscal year will not be achieved. The improvement in the tourism sector has not been enough to counteract the limitations in the manufacturing industry and the slowdown in supply chain.

The country’s economy has been facing challenges due to low revenue collection and import restrictions, as well as the pressure of current and long-term government obligations.

The finance minister also mentioned that the global economic environment has added to the difficulties faced by Nepal’s economic policy. Despite a slight increase in rice production, inflation has risen to 7.26%, exceeding the 7% limit set in the budget.