Kathmandu. The data shows that the slowdown in the economy has not gone away. Experts say that due to the movement of Jenji, there are alarming signs that this slowdown will increase.
Generally, there is a lot of business during Dashain and Tihar. However, this time the situation is almost deserted. Therefore, it is not yet possible to say how long this slowdown will continue.
According to the financial report released by the Nepal Rastra Bank for the month of July, the growth of deposit and loan has decreased. This shows that the economy is contracting rather than expanding.
In the first month of the current fiscal year, the deposit mobilization of banks and financial institutions decreased by 0.8 percent and the credit to the private sector decreased by 0.1 percent. Although the interest rate of the bank has been decreasing, the morale of the private sector has not increased.
The morale of the private sector, which could not increase until the situation returned to normal in July, has further deteriorated due to the damage caused by the Genji agitation in the last week of August. As a result, experts point out that the economy will be further affected in the coming days. Governor Bishwa Poudel has said that the morale of the private sector has been demoralized due to the disintegration of the situation during the Genji movement.
Poudel said that the morale of all has decreased after the incident of attack and it should be addressed. “The morale of all is low now and it is the need of the hour to lift it,” he said, adding, “There were challenges before this incident and it has only increased now.” Preparation is necessary for a solution. ’
A total of 68 branches of 68 banks were damaged in the protests held on September 7 and 24.
According to the report of the first month of the current fiscal year released by the Nepal Rastra Bank, the deposits of the banks and financial institutions decreased by Rs 55.79 billion to Rs 72.08 trillion and the loan decreased to Rs 7.208 billion. It decreased by Rs 2.93 billion to Rs 5.495 trillion.
In the same period of the previous year, deposits had decreased by Rs 43.45 billion (0.7 percent) and loans increased by Rs 14.11 billion (0.3 percent).
Credit to the industrial production sector decreased 0.8 percent, construction sector decreased 0.6 percent, wholesale and retail trade sector decreased 0.5 percent, service industry sector decreased 1.5 percent and consumer sector 0.04 percent.
The decline in credit from the industry and construction sector confirms that the economy is in a state of contraction. If the construction sector can be vibrant, all sectors of the economy will gain momentum. However, experts say that the situation in the same area is deteriorating.
The average base rate of commercial banks was 5.78 percent, that of development banks was 7.28 percent and that of finance companies was 8.87 percent. In 2081, the average base rate of commercial banks was 7.61 percent, development banks 9.28 percent and finance companies 10.75 percent.
According to the NRB, the weighted average interest rate of commercial banks was 7.76 percent, development banks 9.09 percent and finance companies 9.98 percent. In mid-July 2081, the weighted average interest rate of commercial banks was 9.68 percent, development banks 11.07 percent and finance companies 12.32 percent.
Loans to the private sector have become negative after the banks reduced the old loans instead of increasing the loan investment. According to the Nepal Rastra Bank, the credit flow from the banks and financial sector to the private sector has become negative by 0.1 percent during the period.
