Economy faces headwinds but finance minister is oblivious to the crisis

Last week, Finance Secretary Madhu Kumar Marasini sent out a tweet that carried some warning signals.

“Hyped consumer demand, supply chain management chaos, hoarding, hyper credit, rising inflation: bullwhip!!!,” Marasini wrote on the social media platform, drawing quite some attention.

The finance secretary’s tweet comes at a time when indicators of both domestic and external sectors of the economy are not encouraging. Multiple experts the Post spoke to over the past few weeks say Nepal’s economy is taking a turn for the worse.

But precious little is being done to overcome the crisis.

Finance Minister Janardan Sharma appears oblivious to the headwinds the economy is facing. Instead, he has been belittling those who have been sceptical of the government’s 7 percent growth target.

During a meeting of the parliamentary Finance Committee on December 9, the finance minister said “conditions are favourable for achieving the targeted 7 percent growth.”

“We can achieve it and we should achieve it,” he said.

But how?

In the last four months since the start of the fiscal year, remittances have dropped, imports have surged and foreign exchange reserves have depleted. The country is not seeing tourists due to the pandemic. A large amount of paddy crop was destroyed by October’s unseasonal rainfall. Inflation rate is rising with a 19-month high recorded in mid-November. The country is facing a liquidity crunch. The government spending which would help ease the…