Macro Case
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Transcript of Macro Case
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DOCKING NEPALS
ECONOMIC ANALYSISNEPALECONOMICFORUM (JUNE 2012)
Presented by:
Shubhekchha Neupane
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INTERNATIONALECONOMY
Nokia in trouble
(first quarter operating loss of 1.7 billion)
Gold price increase
(price surged past US dollar 1,600)
Dollar raises against the rupees
(outflow of capital from India)
India cuts interest rates
(cut half a percentage for the first time in three years)
China moves towards currency liberalization
(loosening the trading bond limits for Yuan)
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According to the International Monetary Fund (IMF)
world GDP is set to rise by 3.5% this year and by
4.1% in 2013.
Nepal will be able to enjoy the trickle down effects
of economic growth - specially from increasing
labor demand.
Other than from remittance Nepals link to the
global economy is limited.
The slowing down of the Indian and Chinese
Economies suggest that the future holds challenges
for the Nepalese economy.
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ACCORDINGTO CENTRAL BUREAUOF STATISTICS
(CBS)
GDP for fiscal year 2000/01 : NPR 413 billion
GDP for fiscal year 2010/11 : NPR 637 billion
Gross National Income in 2000/01 : NPR 19,144
Gross National Income in 2010/11 : NPR 46,859
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CASE ANALYSIS
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AGRICULTURE
The agricultural budget increased by 17.87% to
NPR 384.9 billion.
NRB made it mandatory for banks and financialinstitutions to ensure that the agriculture sector
accounts for at least 10% of total lending by July
2014
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EDUCATION
Fee ceiling set for private schools
Campaign of proving primary education to all
children by 2015
Vocational subjects soon to be an integral part of
school education.
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ENERGY
For the fifth time in current fiscal year, there has
been a hike in the price of petroleum products.
According to NOC, approximately 531 megawatt ofelectricity is generated through the use of diesel.
LGP Consumer Cards issued.
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FOREIGNAID
Japan provides grant of NPR 580 million for theSindhuli Road Project.
Germany pledged NPR 1.06 billion towards health
sector reforms.
Nepal is likely to lose at least NPR 430 million in
annual aid assistance from Canada.
ADB to assist in urban development (NPR 931
million)
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HEALTH
School Health and Nutrition Project gains ground in
VDCs (546 primary schools in 60 VDCs)
No polio detected in Nepal for 20 months
Health ministry to table human resource plan)
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TRADE
Nepal dropped 21 places in the last five years inGlobal Logistics Performance Report.
Trade deficit stands at USD 3.2 billion
Decrease in the import of high value goods such as
vehicles, cement, rods, etc
Increase in the import of low value goods such as
food, readymade garments and luxury items such
as shoes.
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REMITTANCE
In the period of 7 months, starting from September
2011, Nepali insurance companies have sold
insurance policies worth NPR 594.1 million.
Migrant workers number increase almost 19%
compared to last year.
Worker demand more than supply.
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CONCLUSION
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Agriculture
To protect local farmers the government also needs to
implement strict measures when it comes to informal trade ofagricultural commodities.
Education
The government is seeking to improve education levels throughits school enrollment programs while increasing the impact of
education by improving the quality of education through
education in mother tongue.
EnergyAlternative and renewable sources of energy such as biogas,
solar energy and wind must be looked into to arrive at a long
term solution for the country.
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Health
Nepal continues to show improvement in most of its health
indicators with the exception of neo natal mortality.
Foreign Aid
Aid effectiveness continues to be ineffective due to a lack of
transparency in the flow or distribution of foreign aid.It is necessary to internalize international tools like the
International Aid Transparency Initiative (IATI) to ensure financial
transparency.
TradeIf Nepal is to increase its global competitiveness and integrate into
the world economy , it needs to focus on creating the right policies
and infrastructure.
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Remittance
In the long run a remittance dependent economy will be
dependent on the success of other economies.
Indirect benefit of remittance includes increase in business for
insurance companies; increase in financial service agencies. It
leads to increase in liquidity and in turn improving access to
capital in Nepal.
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THANKYOU!!!