KATHMANDU: The growth rate of Nepal’s revenue collection for the first three months of the current fiscal year has shown modest progress, reflecting the challenges of a sluggish economy. Despite expectations of a higher growth rate, the actual revenue increase has remained limited, raising concerns ahead of the country’s biggest festival, Dashain.
Historically, the pre-Dashain period witnesses a surge in consumption, boosting revenue. However, this year, no such significant uptick has been observed. For the past three years, low consumption levels have contributed to shrinking revenue collection, indicating deeper economic stagnation.
According to recent government data, revenue collection grew by only 13 percent in the first quarter of the fiscal year. By the end of Ashwin (mid-October), total revenue reached NPR 248 billion, a modest increase from NPR 219 billion during the same period last year. This sluggish growth has raised concerns about the overall health of the economy, especially given the lack of significant progress in total income.
Adding to the concern is the widening gap between government income and expenditure. In the first quarter, the government’s total income before revenue distribution stood at NPR 253 billion, while expenditures surged to NPR 329 billion. This gap has raised alarms about fiscal sustainability as Nepal faces increasing demands for public spending with limited revenue growth.
Economic experts have attributed the slow revenue growth to weak consumer spending, reflecting the broader slowdown in Nepal’s economy. The government will need to address this issue urgently, particularly as festival seasons typically represent an important revenue boost for the country. Without strong consumer demand, however, revenue collection may continue to underperform, exacerbating the already challenging fiscal landscape.
The government is expected to release updated financial forecasts in the coming weeks, which could provide clearer insights into the challenges facing the country’s economy and the possible need for further fiscal measures to stimulate growth and consumption.