Kathmandu, Jan. 1
A recent survey Confederation of Nepalese Industries
(CNI) has found no improvement in the economy in the first quarter of the
current Fiscal Year 2023/24 compared to the situation in the previous FY
2022/23.
While the government has been reiterating about the
reforms in the economy citing the positive indicators in the balance of
payment, foreign exchange reserve, gradually decreasing bank interest rates as
well as increasing remittance and decreasing imports, the private sector body's
research has concluded otherwise.
"It is seen that the overall demand in the market
has gone down. The price of raw materials is constantly rising. It seems that
there has been a decline in the import of raw materials of the industry,"
showed the CNI study which was made public on Monday.
"Due to the adverse economic conditions, the morale
of the industrialists and businessmen was seen to be weak last year, which has
remained the same even in the current year. According to the survey, last year 69.44
per cent of industrialists and businessmen said that they had postponed their
investment plans, while in the first quarter of this year, 55.32 per cent of
industrialists and businessmen said that they had postponed their investment
plans.
It is our understanding that the economy has not improved
as claimed by the government, said President of the CNI, Rajesh Kumar Agrawal. The
survey has made a comparative study of the first quarter of the last three fiscal
years.
According to the survey, the overall market demand for
industrial products decreased by 28.28 per cent last year. It has been seen
that it has further decreased by 12.06 per cent during the same period of the
current fiscal year.
Compared to the same period of 2022/23, there has been a
total contraction of 36.93 per cent in the overall demand of industries in 2023/24.
Similarly, the turnover of industries has decreased by 24.94 per cent in the
previous year while it went down by 7.46 per cent in the same period of this
year.
In comparison to the 2021/22, industrial turnover has decreased
by 30.54 per cent.
"The government of Nepal and the regulatory bodies
have been arguing that the economy has improved since the last few months after
accepting the reality of the economic slowdown. However, this claim is based on
the data of the external sector of the economy," said the CNI.
According to Agrawal, in order to assess the reality of
the economy, the CNI has conducted a survey at the industry business level in
order to assess the reality of the economy when such data and claims of the
government do not match with the experience and fact-analyses of the public,
private sector and the media.
Sector-wise analysis shows that the overall demand of the
cement industry has contracted by 7.36 per cent compared to the previous year.
It had decreased by 40.17 per cent at the same time last year.
Similarly, last year, the amount of turnover of such
industries had decreased by 39 per cent, but in the same period of the current year,
there has been a further decrease of 9.54 per cent.
Likewise, the overall demand in the construction sector
has gone down by additional 16.20 per cent than that of the previous year. It
had plummeted by 43.43 per cent in the same period last year. Compared to the situation
in 2021/22, the total demand of this sector has contracted by a total of 52.59
per cent in 2023/24.
In the first quarter of the previous year, the demand of
the FMCG (fast moving consumer goods) sector increased by 2.50 per cent, but the
study found that this year it has declined by 17.70 per cent. In comparison to 2021/22,
the total demand of this sector has contracted by a total of 15.64 per cent now.
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