Nepal’s tourism industry back on track

Nepal’s tourism industry is back on track if foreign tourist arrival figures over the first three months of 2024 are anything to go by.

Foreign tourist arrivals via air recorded a year-on-year growth of 33.78 percent in the first three months of 2024. Tourist arrival data released by the Nepal Tourism Board (NTB) shows a total of 304,693 foreign tourists have entered the country till March this year, compared to 227,755 in the same period of 2023. Over the past few months, the tourism sector is playing a vital role in the tourism recovery. A report published by the World Bank on April 2 states that the services sector emerged as a primary driver of this growth on the supply side, buoyed by increased activity in tourism-related services.

A total of 128,167 foreign tourists arrived in Nepal in March this year, compared to 99,427 in March last year. This is higher than the pre-covid footfall for the month. Nepal had welcomed 127,351 in March 2019. However, the total arrival in the first three months of 2024 is still lower than the total arrivals in the first three months of 2019 when Nepal welcomed 311,047 foreign tourists.

Nepal welcomed 1,197,191 foreign tourists in 2019 which has remained the best year for the industry so far. Arrival numbers fell to 230,085 in 2020 and further to 150,962 in 2021. It improved to 614,869 in 2022 and rebounded to 1,014,876 in 2023. Arrival figures over the first three months suggest that Nepal is on track to beat the 2019 numbers this year. March marks the beginning of the spring tourism season which is considered the best for trekking and mountaineering. The spring season sees a lion’s share of mountaineering expeditions coming to Nepal. Most of the expeditions on Mt Everest, the tallest peak on earth, are organized in this season.

According to tourism entrepreneurs, tourist numbers will continue to increase till May which marks the end of the climbing season and the beginning of monsoon rains. While tourist numbers dip during the three months of June, July, and August, it starts picking up once the autumn season begins in September. The autumn season continues through December. 

As usual, India was the largest source market for Nepal in March, with 30,698 visitors. It was a year-on-year growth of 18.5 percent. The number of Chinese tourists also increased considerably to 12,093—a growth of a staggering 358 percent. The US came third with 10,763 visitors, followed by the UK with 7,241 tourists, Sri Lanka with 5,741 visitors, and Germany with 5,255 footfalls. Likewise, Thailand, Myanmar, France, and Australia were among the top 10 countries in terms of visitor numbers. Region-wise, Asia (SAARC) contributed the highest number of visitors in March, accounting for 31.8 percent of total arrivals. 

Similarly, Asia was next, contributing 22.4 percent of total arrivals, followed by Europe (21.5 percent), Oceania (4.8 percent), the Americas (9.8 percent), and Others (9.7 percent). Tourism entrepreneurs say the tourist arrivals would be much higher once the new international airports in Lumbini and Pokhara start handling international flights.

WB projects inflation to remain at 6.7 percent in 2024

The consumer price inflation in Nepal is expected to remain high at 6.7 percent in Fiscal Year 2024, close to the central bank's 6.5 percent ceiling, due to VAT exemptions removal, India's food export restrictions, and increased paddy minimum support prices.

However, inflation is forecasted to decline to 6 percent in FY25 and 5.5 percent in FY26, driven by global commodity price moderation and domestic price containment through monetary policy. Projected lower inflation in India may also help reduce domestic inflation via the currency peg, mitigating imported inflation, the World Bank (WB) stated in its Nepal Development Update (April 2024) it unveiled on Tuesday.

According to the WB, Nepal's economic growth is set to rebound, from 1.9 percent in FY23 to a forecast 3.3 percent in FY24. Growth is then projected to further accelerate to 5 percent on average, over FY25-26. This recovery is largely attributed to the easing of monetary policy, assuming productive use of private sector credit. Additionally, reforms to improve the business environment could attract more private investment, further boosting medium-term growth prospects.

The services sector is expected to be the key driver of growth in the coming years. Accommodation and food services are poised to benefit significantly from the rise in tourist arrivals. The ongoing construction of new five-star hotels and government policies supporting real estate loans are expected to further stimulate the accommodation sub- sector.

Meanwhile, the industrial sector is expected to grow, buoyed by significant expansions in electricity generation capacity, fostering a more conducive environment for industrial activities. However, agricultural growth is projected to slow down due to various factors, including the outbreak of lumpy skin disease among livestock and a decrease in paddy production growth.

The current account balance is forecasted to return to surplus in FY24, driven by robust remittance growth and a narrowing trade deficit, but is expected to narrow subsequently as remittances taper off and the trade deficit expands.

The trade deficit is expected to improve in the medium term, falling below its FY23 level. This is due to a projected decline in goods imports in FY24, although imports are expected to rebound in FY25 and FY26. Goods exports, particularly in electricity, are expected to increase. While services exports could rise with tourism recovery, services imports may surpass exports due to continued emigration. Despite efforts to attract more foreign direct investment, inflows are likely to remain modest.

Nepal's fiscal deficit is poised to decrease significantly from its peak in FY23 (about 6 percent of GDP), stabilizing around 3 percent of GDP in the medium term, despite a projected higher deficit in FY24 compared to the government's revised forecast. Revenue is expected to rise to 20.1 percent of GDP by FY26, supported by robust GDP growth and increased goods imports. Meanwhile, spending is expected to increase to 22.8 percent of GDP by FY26, driven by enhanced execution of public investment.

The National Project Bank’s integrated guidelines, introduced in March 2023, aim to streamline project development and prioritization, contributing to more effective capital spending by FY25. Financing for the fiscal deficit will likely come from external concessional borrowing and domestic sources. However, public debt is projected to decline to 40.8 percent of GDP by FY26 from its FY23 peak because of higher economic growth.

The forecast is subject to both domestic and external risks. Externally, geopolitical uncertainty could trigger a rise in commodity prices, impacting all sectors. A growth slowdown in partner countries might also lead to a drop in remittances and tourism, hindering economic growth. Persistent inflation expectations and lower domestic demand could further dampen economic activity. Natural disasters pose additional risks to sustaining welfare gains.  Finally, frequent political changes, a top headwind for businesses for over a decade, could continue to deter private investment.

Nepal's poverty rate fell due to migration and remittances, alongside consumption increases. The recent nationally household survey data from the Nepal Living Standard Survey 2022/23 shows a large decline in poverty from 25 percent to just 3.6 percent between 2011 and 2023 (using the 2011 National Poverty Line). The prosperity gap and inequality also reduced over the same period. However, challenges persist with a weak labor market and limited social assistance, posing risks amid economic and climate shocks.

Overall, H1FY24 data corroborated the structural challenges facing Nepal's economy.

On the fiscal front, the Nepal Development Update highlighted the need to strengthen the execution and efficiency of capital expenditure to boost economic growth, as well as the importance of reducing dependence on imports tax revenue.

Sound and consistent monetary policy will also be key to boosting confidence and stimulating economic growth. Addressing the increasing level of non-performing loans in the financial sector is crucial to strengthen financial stability and support private investment. On the external side, the high dependency on remittance inflows exposes the country to external shocks. Thus, there's a need to strengthen Nepal's international competitiveness for other sources of external earnings, such as tourism and foreign direct investment, by boosting exports of goods.

 

KMC urges institutional schools to keep their names embodying Nepali identity

Kathmandu Metropolitan City (KMC), Education Department has urged the institutional schools under the metropolis to name the schools embodying the Nepali identity.

Issuing a public notice today, the Education Department asked the institutional schools for the same.The Department reminded that the Rule 154 (1) of Education Regulations, 2059 (with amendment) and Rule (70) of KMC School Education Management Regulation, 2074 have the provision that schools should be named, reflecting the Nepali identity. 

The Department also directed such institutional schools under the KMC to contact the KMC Education Department within seven days, saying the names of most institutional schools are found against this provision.

The notice reads that legal process could be forwarded as per the law like prohibiting the student admission process if a process to name the school reflecting Nepali identity is not adopted and contacting the Department within a week.

The Department asked such institutional schools to file application at the KMC within 35 days of deciding the name from school management committee.

 

Get to know the super cool bel

Bel fruit, scientifically known as Aegle marmelos, offers a multitude of health benefits. Studies suggest that bel possesses antimicrobial properties, potentially aiding in the fight against certain bacteria and fungi. Its anti-inflammatory effects have also been noted, providing potential relief from bodily inflammation.

Moreover, bel is believed to harbor hepatoprotective properties, which could contribute to liver health, along with anti-diarrheal effects to alleviate digestive discomfort. Its anti-mutagenic properties may help prevent DNA damage.

When you delve into the study of bel, you can uncover many more claims about its health benefits. But did you know that bel patra once cooled down Lord Shiva? If it could cool down the God of Gods, then the pulp of the bel fruit can cool us down during summer. How? Let’s begin with the story of Mahadev or Shiva during the time of the churning of the ocean.

But first, let’s address the false story of bel bibaha—the misinformation about Newar girls marrying the bel fruit. The ceremony is called Ihi, and the girls are married to Suvarna Kumar, which symbolizes Lord Vishnu. It probably started to save Newar women from ‘Sati Pratha,’ where widows were forced to sacrifice themselves in the burning fire. During Ihi, bel fruit is given as a witness, as bel fruit (wood apple) has a peculiar quality of not rotting and remaining fresh forever.

Due to the release of poison during the churning of the ocean, the entire world became unable to bear its heat. Even the Sura and Asura (gods and demons) were troubled by the heat. Then everyone worshiped Lord Shiva and asked him for his help in getting rid of the heat created by the poison.

Lord Shiva drank the poison to free everyone from it. The heat of the poison was so intense that its effect did not diminish, and Mahadev’s throat turned blue. Then the Sura and Asura offered bel patra and water to Mahadev. Due to the effect of bel patra, the temperature of the poison started decreasing. Lord Shiva’s fever subsided after the offering of bel patra, and he became happy and blessed everyone, saying that from now on he would fulfill every wish of those who offer bel patra to him. Since then, the tradition of offering bel patra on Lord Shiva or one of his forms—the Shiva linga—has been ongoing.

According to another story, the leaves are dearest to Lord Shiva because the Purana mentions that once Goddess Parvati’s sweat droplets fell on the Mandrachal Mountain. It led to the growth of the bel plant. So, the Goddess is considered to reside in the bel tree in all her forms.

Bel is known as Bengal quince, stone apple, curd fruit, elephant apple, Adhararutha (Sanskrit), Iyalbudi (Tamil), Sriphalamu (Telugu), Billi (Gujarati), and Bel in Nepali, Hindi, and Bengali.

Bel possesses many medicinal values and is therefore used as an ingredient in Ayurvedic herbal medical preparations. The fruits, bark, leaves, seeds, and roots of bel contain bioactive compounds such as coumarin, xanthotoxol, imperatorin, aegeline, and marmeline.

Bel sharbat is traditionally made during summer. It’s said that if you drink bel sharbat in the morning, it will protect you from outside heat throughout the day. The plant is highly edible, and the fruit is eaten raw or made into marmalades, jams, jellies, and drinks.

In Indonesia, the fruit is opened and dressed with palm sugar for eating at breakfast. Young leaves and shoots are cooked as a vegetable in Thailand or used as a condiment in Indonesia. An infusion of the flowers is used to make a refreshing beverage. The fruit is also processed to make candied fruit and fruit toffees.

In Nepal and India, bel sharbat is quite popular during summer. There are many ways of making it. The seeded pulp is beaten also with milk and sugar to make sharbat. In the Indian state of Odisha, bel fruit pulp is mixed with fresh cheese, milk, water, sugar, crushed black pepper, and ice, and it becomes the great drink called bela pana.

During their New Year’s Day, Maha Bishuba Sankranti (on Baishakh 1 of the Nepali New Year’s day), Odia people prepare special bela pana with ripe bel, milk, black pepper, cheena (cheese curd), tiny pieces of peeled banana and honey or jaggery, yogurt, cardamom, ground cashews, and freshly grated coconut.

One popular method of making bel sharbat is to wash wood apples, cut them, and take out their pulp. Mix it with double the volume of water and mash it. Run this mashed pulp through a strainer and extract the juice by pressing it with the help of a spoon.

Add sugar to the juice. When it’s mixed in the juice properly, pour cold water or put some ice cubes in it. You can mix salt and cumin (jeera) powder as per your requirement. You can make four to five glasses of squash from one kg of wood apples.

Efforts to conserve the Bel tree are crucial as over-exploitation and habitat degradation have led to its classification as ‘near threatened’ on the IUCN Red List. To safeguard this vital aspect of culture and tradition, initiatives to plant and conserve bel trees are necessary.

 The author is a UK-based R&D chef