Nepal’s government expenditure has increased by 10 percentage points in the last decade.
The root cause of Nepal’s liquidity crunch, which is an excessive dependence on imports and remittances, needs to be addressed.
Despite a lot of foreign currency being spent on imports, Nepal hasn’t seen a significant inflow of foreign currency.
Nepal lacks a market or exchange where foreign exchange derivatives can be traded freely for the purpose of hedging or earning short-term gains.
The contribution of remittances was considered a major positive in the otherwise sluggish economy of the low-income countries.