Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has stated that Nepal’s sovereign credit rating reflects a positive investment climate in the country.
Speaking at a meeting with development partners at the Ministry on Monday, Paudel highlighted the political and policy stability resulting from the formation of a coalition government, including the participation of two major political parties—the Nepali Congress and the CPN (UML).
He expressed optimism that this stability would boost private sector confidence and attract increased foreign investment into Nepal.
“Since the formation of the current government, the country’s economic indicators have been improving,” Paudel said.
The Minister emphasized the government’s focus on fostering an environment conducive to infrastructure development, human resource growth, and private-sector investment. He pointed to several factors contributing to economic strength, including a positive current account balance, growth in electricity exports, increased remittances, and a rise in tourist arrivals. However, he stressed the importance of diversifying and expanding exports to further strengthen the external sector in the long term.
Paudel also noted that public investment is expected to improve, following a reduction in capital expenditure in recent years. He explained that the government is prioritizing the enhancement of project quality to address this issue.
Reassuring the public about the burden of public debt, the Finance Minister stated that there is no need for concern. He added that the government recognizes the need to re-prioritize loan mobilization.
A draft of a new finance mobilization policy is being developed, Paudel mentioned, with hopes of receiving constructive input from development partners.
The Finance Minister also highlighted the government’s commitment to improving the public finance management system and collaborating with development partners on key issues such as climate change mitigation, climate adaptation, and building a green economy.
“We are facing challenges in maintaining public finance balance,” he acknowledged, noting that infrastructure investment has decreased due to rising expenditures in social security programs and debt servicing. “However, Nepal’s economy is not without its challenges,” he added.
Paudel further explained that resource mobilization at the provincial and local levels is essential to meet demand, while the government also has to allocate budgets for ongoing strategic projects.
He reiterated the government’s commitment to implementing a new revenue mobilization strategy aimed at sustainability, emphasizing that internal efforts alone will not be sufficient to fund all development initiatives.
The Finance Minister stressed the crucial role of development assistance in Nepal’s fiscal management and called on development partners to collaborate on joint initiatives for more effective and long-term outcomes.
Representatives from various development partner organizations expressed their willingness to continue supporting Nepal’s economic development and thanked the government for establishing the High-level Economic Sector Reform Recommendation Commission. They also noted that Nepal’s improved credit rating would help attract foreign direct investment.
Representatives from the World Bank, Asian Development Bank, and the United Nations Development Programme, among others, attended the meeting.
