PM Oli Claims Economic Progress, Critics Say Reality Remains Unchanged

Prime Minister KP Sharma Oli has claimed that Nepal’s economy has significantly improved compared to when he assumed office a year ago.

Addressing Parliament on Wednesday about his participation in the Third UN Conference on Landlocked Developing Countries, held from August 5–8 in Awaza, Turkmenistan, Oli stated that Nepal’s economic growth rate had risen from 3.7% last year to 4.6% during his tenure. He added that the country’s Gross Domestic Product (GDP) had expanded by NPR 400 billion.

Infrastructure and Legal Reforms

Oli highlighted progress on stalled infrastructure projects, such as the Narayangadh–Butwal eastern road section, which he said is now over 70% complete and expected to finish next year. The Muglin–Pokhara and Muglin–Naubise roads are under rapid construction, and the Nagdhunga–Naubise tunnel is nearing operation.

He claimed that over the past year, three dozen laws had been amended to promote good governance, improve public services, create an investment-friendly climate, and attract foreign investment.

Economic Indicators

Oli reported that despite natural disasters and global challenges, revenue collection had increased by 11.3%. Remittance inflows rose by 15.5% to NPR 1.533 trillion in the first 11 months of his term. Exports grew by 81.8%, and both the current account and balance of payments were in surplus. Foreign exchange reserves reached a record high, enough to sustain 14.7 months of imports.

However, critics argue that these improvements are largely due to external factors rather than government action. The surge in remittances is attributed to more Nepalis leaving the country due to limited domestic job opportunities. Likewise, export growth has been driven mainly by India’s tariff revisions, which increased imports of palm and soybean oil to Nepal, later re-exported to India.

Financial Sector and Credit Rating

Oli claimed the financial sector had strengthened, with private-sector credit up by 8.7% and nearly 48% of the population now covered by insurance.

He also noted that, for the first time, Nepal received a sovereign credit rating from global agency Fitch Ratings — BB minus, the second-best in South Asia. But analysts point out that this rating process began under the previous government and was only concluded during Oli’s tenure.

Policy Measures and Investments

Oli said the new fiscal and monetary policies had revived Nepal’s real estate and stock markets, while liquidity in banks had improved and lending rates had dropped.

Other measures included:

• Fully online company registration
• Automatic approval for foreign investment up to NPR 500 million
• Start-up funding for 600 firms, totaling NPR 886.6 million last year

However, he did not address the government’s failure to pay NPR 13 billion in interest subsidies for concessional loans, which has deprived citizens of affordable credit for over two and a half years.

Energy and Trade Achievements

Oli reported electricity exports worth NPR 17.45 billion to India last year, up by NPR 390 million from the previous year. Nepal also began electricity exports to Bangladesh for the first time, totaling NPR 260 million.

He announced the start of petroleum pipeline construction from Siliguri, India, to Charali, Jhapa, as well as the expansion of the Amlekhgunj–Lothar pipeline and a greenfield terminal in Lothar.

Consumer Protection and Connectivity

Oli said a Consumer Court had been established in Kathmandu under the Consumer Protection Act. He also highlighted a 166% increase in suspension bridge construction — from 210 bridges the previous fiscal year to 559 last year — including a new bridge in Susta, Nawalparasi.