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Global recession could hit Nepal's remittance income: IMF

Monday - 24th November 2008

The ongoing global economic crisis could hit the remittance earnings for Nepal, according to officials of International Monetary Fund (IMF).
The remittance earning is the mainstay of foreign exchange earning for Nepal. Last year, Nepal earned nearly Rs 100 billion from remittances. And in recent years, the remittance earning has grown by thirty percent, on average.
Addressing a press conference in Kathmandu, Sunday, Brian J. Aitken, deputy division chief, Asia and Pacific department of IMF, said, "Remittances remain the primary source of foreign exchange and they have been growing very rapidly. What we expect is there will be slowdown of that growth rate. And if it occurs it will take place over several years."
But he pointed that economic situation of India will have far more bearing on Nepal than the global recession.
"Nepal is fairly isolated from the global economic situation. But the main shadow is probably the slower growth in India," he said.
Aitken, however, downplayed concerns that donor assistance for Nepal could also be decreased due to slowdown in economies of western countries.
"I don't see any slowdown in donor pledges. And I certainly do not expect any over the next year or two. Governments may reassess their pledges but they certainly haven't done so in case of Nepal," he said.
Aitken had led an IMF delegation, which had come to Kathmandu, to evaluate the budget prepared by the new government.
The delegation has concluded that the budget, particularly its revenue target, is ambitious and could jeopardize the budget's stability if they are not met.