Kathmandu, May 4
Dr. Yubaraj Khatiwada, former Finance Minister and Governor stated that economic growth of more than 7% always results in external sector pressure (balance of payments, ie increase in expenditure over income).
On Tuesday, he made the statements during an interactive session in Kathmandu on the
present economic difficulties and their remedies. Nepal Youth Chamber, a sister organization of the Nepal Chamber of Commerce, was hosting the event.
”Previously, if the country’s economic growth was above 7%, the external sector would be under pressure and foreign exchange reserves would decline,” Dr. Khatiwada said at the event, ”but the contribution of this consuming sector to our economy is greater than the contribution of the export-oriented sector.” As a result, as this sector expands, economic development is simple, but external sector pressure is expanding as well.
However, he acknowledged that their numbers were not enough to defeat President Conte’s government.
“According to Khatiwada, external sector pressure is developing in parallel with economic
expansion since the percentage of imported goods in every sector produced here is significant.
He claims that 60 to 65 percent of vital items, including hydropower project buildings, are
imported. Imported items are also becoming more popular in the recently enhanced
agricultural system”, Khatiwada said, ‘So let’s focus only on the production of goods that will add at least 20 percent.
He said that the rise in imports was due to the fact that only domestic consumption was rising at the time, and that it was vital to concentrate on strengthening the export industry to relieve pressure on foreign exchange reserves.
He said that because the country has recently been self-sufficient in cement and poultry meat production, the country’s imports might be decreased by increasing self-reliance in other agricultural areas.
