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While there are concerns growing over the rise in internal and external debt burdens of the country in recent years, Nepal appears to be in a safe position in terms of indebtedness compared to most South Asian countries. In South Asia, Nepal’s external debt to revenue ratio is the third lowest after Afghanistan and India, according to Debt Justice, an INGO, said in its latest report published early last week. Nepal’s projected external debt payment in 2022, 2023, and 2024 stands at 4.2 percent, 4.3 percent, and 4.5 percent, respectively, of total government revenue, according to the report. When it comes to Afghanistan, it is 1.5 percent, 1.6 percent, and 1.7 percent of the revenue in the three years, the report stated. India’s scheduled external debt payment is 3.2 percent, 3.1 percent, and 3.3 percent of its revenue in these three years. Sri Lanka is in the most vulnerable position followed by Pakistan. High indebtedness and shortage of foreign exchange reserves invited massive protests in both countries as the former strongman president of Sri Lanka—Gotabaya Rajapaksa was forced to flee the country last year. According to the report, Sri Lanka’s external debt payment to annual revenue ratio is projected to be 81.4 percent, 75 percent, and 78.6 percent in 2022, 2023 and 2024, respectively. The report said Sri Lanka is spending the highest percentage of its revenue on servicing foreign debt. When it comes to Pakistan, its projected external debt payment in these three years is expected to be 40 percent, 46.7 percent, and 42.5 percent. Projected external debt payment by Bangladesh, Bhutan, and Maldives in these three years compared to their government’s annual revenue is projected to be much higher than that of Nepal, according to the report. The Debt Justice said that the figures for external government debt payments have been calculated primarily from the World Bank’s International Debt Statistics database while the figures for government revenue are calculated from World Economic Outlook by the International Monetary Fund (IMF) in October last year. Data show that Nepal is less vulnerable to external debt compared to other South Asian countries. "Nepal still has a lot of fiscal space to grow its external debt," said an economist. According to the Public Debt Management Office, Nepal’s total outstanding external debt stood at Rs 1102.5 billion out of a total of Rs 2070.5 billion as of the second quarter of the current fiscal year 2022-23. Nepal’s total debt to Gross Domestic Product (GDP) ratio as of the second quarter of this fiscal stood at 42.67 percent and the share of external debt was 22.72 percent. Nepal’s newly introduced law on Public Debt Management allows the government to raise external loans up to one-third of the country's GDP in the past year. Officials say as nearly 90 percent of external loans have been received from multilateral donors like the World Bank and the Asian Development Bank, whose interest rate is below one percent, Nepal is not facing much risk of inflated cost. But in recent years, Nepal’s public debt has been growing rapidly. Both external and internal loans of the government have been surging to cover the cost of post-earthquake reconstruction since 2015 and to tackle Covid-19, according to the PDMO. As a result, the government has been forced to spend big on debt servicing. A total of Rs 186.6 billion has been allocated for loan repayment in the current fiscal year, of which Rs 134.32 billion is for internal debt servicing. In the last fiscal year, the government spent Rs 121.99 billion on debt servicing. Amid growing debt liability amid sluggish revenue collection, there are concerns that the debt would be used in projects with high yields. “It is necessary to ensure that debt is utilized in financially feasible high-yielding sectors,” said the economist. Percentage of external debt against govt's revenue  

These days, tourists can be seen holidaying around Pokhara's popular tourist attractions, such as lakes, caves, wetlands, and the popular Annapurna region in increasing numbers. Their presence here has brought new hope for Pokhara's tourism industry, which has been struggling after the COVID pandemic. The latest data from the Annapurna Conservation Area Project, which maintains data on trekkers heading to the Annapurna region, show tourist numbers getting closer to the pre-COVID era. This is a promising sign for the tourism industry in Pokhara and suggests that the negative effects of the pandemic are on the wane. According to industry insiders, about 80 percent of tourists who visit Pokhara want to explore the region for purposes like trekking and study. The Annapurna Round Trek, Mardi Himal Trek, Muktinath-Mustang loop as well as the Machhapuchhre Base Camp, Annapurna Base Camp and Khumai Dada are some of the popular trails and destinations around Pokhara. "Since most of the tourist areas in and around Pokhara fall under the jurisdiction of the ACAP, our data offer a clear picture of Pokhara’s tourism industry,” Narendra Shrestha of ACAP Office in Pokhara said. According to Shrestha, ACAP has been working in coordination with local government bodies for promotion of tourism in the Annapurna region. Autumn and Spring are the main seasons for trekking activities in the region. The autumn begins in September and continues till December or January, whereas the spring begins in March and continues till May. ACAP data show that Pokhara welcomed 129,000 trekkers in 2022, a drastic decline compared to the year 2019 when the city recorded 181,000 trekkers, before the pandemic threw the global tourism industry out of gear. The numbers dropped even further to 18,796 in 2020 and 16,105 in 2021, respectively before bouncing back in 2023. In the first three months of 2023, approximately 33,000 foreign tourists visited different destinations within the region. Data show that around 23,692 visited the region in March alone, indicating that the spring may see a significant surge in the number of foreign tourists.   Tourist arrivals in March (past three years) 2022 - 12,000 2021 - 2,134 2020 - 6,735 Tourist arrivals in first three months of 2023 March - 23,693 February - 6,353 January - 3,457 Arrivals (First three months) of 2019 and 2023

The gold is being traded at Rs 110, 000 per tola in the domestic market on Monday. According to the Federation of Nepal Gold and Silver Dealers’ Association, tejabi gold is being traded at Rs 109, 500 per tola. Similarly, the silver is being traded at Rs 1,450 per tola today.

With the drastic slowdown in economic activities in the country, the government is finding it hard to manage resources to fund its recurrent expenditure even after all import restrictions were lifted in early December last year. Nepal's half of the federal government’s revenue comes from the taxes it levies on imports. The Department of Customs (DoC) and Inland Revenue Department (IRD), the key agencies of the country's revenue regime, have reported dismal revenue collection as of mid-April of this fiscal. According to DoC, revenue collection stood at Rs 34.76 billion in Chaitra (mid-March to mid-April) against the target of Rs 57.29 billion. After the government's import control measures, which were aimed at improving the external sector of the economy, affected revenue collection, the government first lifted the over seven-month ban on the imports of automobiles, liquors, and expensive mobile sets in early December last year. Then, on January 20, the Nepal Rastra Bank annulled the nearly year-long provision of importers requiring to deposit cash margins of up to 100 percent in the banks to open letters of credit (LC) for the imports of around 300 goods. However, these measures have failed to help the government to improve revenue collection. Nearly half of the target revenue collection occurs in Chaitra month when imports are supposed to grow to meet the demands of publicly funded projects as the government's capital expenditure accelerates in the second half of the fiscal year. By the end of the third quarter of the current fiscal year, the customs department could collect only Rs 285 billion against the target of Rs 490 billion, collecting only 58 percent of the target. “Even after the import restriction measures were lifted, automobile dealers have not made fresh imports of automobiles,” said a senior official of the customs department. “They have not completed customs clearance even though around 4.000 vehicles have been parked in the customs for months.” Most of these vehicles that were imported in recent months were based on the LCs opened before the government imposed a ban on the import of vehicles along with foreign alcohol and expensive mobile sets among others in April last year. The official said that the automobile dealers have complained about the lack of demand for vehicles in the market and the lack of auto loans. Import taxes on vehicles fall among the largest sources of revenue. In the last fiscal year 2021/22, the government collected revenue of Rs 66.30 billion from four and two-wheelers, according to the customs department. “Likewise, the import of capital goods including machinery and iron and steel have also slumped,” the official said. “It suggests a slowdown in economic activities by both the public and the private sector.” During the first quarter of the current fiscal year, the economy grew by just 0.8 percent. Besides import-based revenue, the situation of inland revenue collection is also dismal. According to IRD, collection of revenue under its offices as of mid-April stood at Rs 337 billion which is less than Rs 342.65 billion collected during the same period of the last fiscal year 2021/22. As of April 15, the overall revenue collection of the government stood at Rs 683.86 billion against the collection of Rs 789.96 billion collected during the same period last fiscal year 2021/22, according to the Financial Comptroller General Office (FCGO). The revenue has not been enough even to meet the recurrent expenditure of the government which stood at Rs 706.85 billion as of April 15. The government is facing difficulty even paying the contractors who have finished their work on various development projects. Citing the reduced resource availability, the government decided to reduce administrative expenditure by 20 percent. Subsequently, the government trimmed its expenditure plan (budget) for the current fiscal year 2022/23 by 13.59 percent through the mid-term review of the budget. This translates to a reduction of a staggering Rs 243.83 billion in the current fiscal year's budget. The revised budget now amounts to Rs 1,549.99 billion against the initial budget of Rs 1,793.83 billion.