Is the economy better or worse?

In order for the economy to become strong and reform, there should have been some new work in the country, but nothing has happened. The topic itself is unclear as to what caused the problem in the past and what is happening now and has improved.

Looking at the data of November 2080, foreign exchange reserves have increased by 36.7 percent compared to 12 trillion 93 billion 26 billion in the same period of last year and remained at 17 trillion 67 billion 4 billion. Which seems to be enough to cover the import of goods and services for 11.8 months.

Remittances increased by 27.6 percent in December 2080, compared to 23 percent in the same period last year. The outstanding debt of the government was 20 trillion 7 billion 13 billion in November 2079, but it is 23 trillion 71 billion 26 billion in November 2080, which is 3 trillion 64 billion more.

If we look at the situation of banks and financial institutions, in November 2079, there were 125 banks and financial institutions and their branches were 11,650. In November 2080, the number of banks and financial institutions and their branches decreased to 11,570. Compared to January 2079, the data shows that deposits have increased by 14.36 percent in January 2080, while loans have increased by 4.95 percent. Still 35 percent of the population is said to be out of financial reach. On the one hand, the number of financial institutions is decreasing, on the other hand, access to finance does not seem to have been reached. Foreign aid commitments in November 2080/81 stood at 58.17 billion. In the same period of last financial year, foreign aid was 1 trillion 9 billion 40 million. In December 2079, the life insurance coverage was 44 percent of the population, but by December 2080, it had decreased to 43.1 percent. The export of goods has decreased by 6.1 percent compared to the same period last year. Exports of palm oil and refined soybean oil, tea, woolen, carpets, carpets etc. have decreased. In the past years, the export of refined palm oil and soybean oil has been high, although there has been a high growth in the total export of goods, but currently there has been a decrease in the export of these goods.

As of November 2080/81, total merchandise imports have decreased by 3.4 percent compared to the same period last year. Gold, diesel, petrol, LP gas etc. are among the items that will decrease in import. Current Account and Balance Sheet As of November 2080/81, there is a surplus of US$ 1.58 billion. In the same period of the last financial year, the post-research position was 346.8 million surplus. Similarly, the current account is in surplus by 1 billion 50 million US dollars, last year the current account was in deficit by 322 million dollars. Tourist arrivals have increased significantly in the first five months of the current financial year and reached 1 million 14 thousand 876. In the same period last year, it was only 546 thousand 216. During this period, travel expenses increased by 59.5 percent. Company registration has decreased in 2080/81 compared to 2079. This year it is 10 thousand 42 and in the same period last year it was 10 thousand 117.

As of November 2080/81, the trade deficit has decreased by 3.1 percent compared to the same period of the previous financial year. It had decreased by 18.8 percent in the same period last year. The share of foreign trade in 2080/81 is imports 91 percent and exports 9 percent. It was 90.7 percent and 9.3 percent in the same period last year.

When studying and analyzing the statistics of the various sectors mentioned above, it is necessary to be clear whether the economy is improving or swelling. In reality, remittances and imports play a major role in the overall economic cycle. If the young people who went abroad without seeing any prospects in the country did not send remittances, where would the state of the country be? On the other hand, import of goods has played a major role. The share of exports in total trade is 91 percent and imports have decreased by 6.1 percent. This means less imports of 4054.95 crores out of total imports. Exports also decreased by 3.4 percent i.e. 341.32 crores. Trade deficit reduced by a total of 4396.27 crores and if balance of payments decreased,

foreign exchange reserves would also be affected.

It has been seen that tourist arrivals have increased. Lately, the number of Nepalese traveling outside the country is also increasing. Not only are the youth leaving the country, but with them, a large amount of foreign currency is decreasing in the name of fees, hostel expenses, pocket expenses.

Looking at the share of total foreign trade, 91 percent of imports and 9 percent of exports, this figure shows the state of our economy. Donor countries' confidence in foreign aid commitments is declining. The amount corresponding to the commitment has been decreasing since last year. This year alone, the data shows a decrease of 50 billion. The scope of life insurance has shrunk, the number and branches of banks and financial institutions have decreased. Similarly, while deposits are around 14 percent, investment is limited to around 5 percent. While about 70 percent of the investment is in imports, the demand for loans will decrease when imports decrease. Looking at the state of debt owed by the government, there has been an increase of 3.61 billion 13 billion this year as compared to last year. There are some aspects, which have a direct relationship about the economy, which shows a decrease in some indices and an increase in some.

The first part: As imports decreased, investment also decreased. Where the deposits taken by the banks and financial institutions remained inactive, the money could not move. Its impact was on various sectors including employment, revenue, construction services.

Second side: Increasing remittances is a good side. However, the issue that we are strong with the money coming from foreign countries is only a matter of satisfaction. 2,200 to 2,500 young people are leaving the country every day.

Third party: Foreign exchange reserve remit increased, imports decreased, investment stalled. The ongoing business has run at a slow pace.

The fourth aspect: It is said that there is more liquidity in banks and financial institutions. The CD ratio of 80 per cent has been reduced to 90 per cent, where as deposits have increased to 14 per cent, investment has become only 5 per cent. The amount collected in the cooperative was not in the scope of the data. Now, after the problems in the cooperatives, it has started coming into the banking channel. 7.6 percent has not been invested, so the financial institution is said to be illiquid. There is still demand for easy loans and there is no environment to invest.

Fifth aspect: has a share of 91 percent imports and 9 percent exports. A 6.1 percent decrease in imports naturally reduces the trade deficit.

The sixth aspect: Now, due to the increase in non-performing loans in financial institutions, there is a challenge in management. In addition, various groups create pressure by commenting that they don't have to pay the loan, they should give a discount. There is a lack of demand for loans in the market. Recession has an impact on ongoing businesses. Liquidity has accumulated in financial institutions, which is driving up costs. On the other hand, there has been a movement from the streets to the parliament regarding the problem of cooperatives.

Even though these various aspects seem to be scattered, we are improving, our data is getting stronger, we are saying that we have accumulated investable funds. Whether the production is agricultural or industrial, from salt to gold, there is dependence. Sometimes the knot of politics tightens and sometimes it breaks. Such a situation should not be misled into thinking that the economy has improved. Such shouts and sweet speeches seem nice to tell others but the truth is obvious. If the internal organs of the body are damaged and the human body is swollen, how can it be called healthy? If the swollen body is not treated in time, other organs may also be affected.

– Kandel is the Deputy Executive Officer of National Commercial Bank.