Nepal will have an economic growth rate of 4.4 percent in Fiscal Year (FY) 2015/16, according to the International Money Fund (IMF). The budget for the current fiscal year is ambitious and its implementation is very challenging, said an IMF mission led by Gerard J Almekinders.

“Though the government says the budget will be implemented, it is challenging,” he said. IMF has also forecast the inflation to reach 8.5 per cent in the current fiscal year.

The IMF mission also said that the reconstruction work after the earthquake has not moved as expected. “For the implementation of the budget, the coordination between Finance Ministry, National Planning Commission and other related ministries is necessary,” said Almekinders at a press conference on October 1.

The mission also maintained that the bigger size of the budget, increment in foreign aid and the remittance will raise inflation. Similarly, the increment in expenditure of the infrastructure projects and growth in agricultural production will help the economy of the country, informed IMF.

Commenting on Nepal Rastra Bank’s current monetary policy, IMF’s senior resident representative in Nepal, India and Bhutan, Dr. Thomas J Richardson said, “The trend in the world is that, to increase sufficient capital and in comparison to other countries, the paid-up capital of BFIs of Nepal is low.” Likewise, Almekinders said “Though the given 2-year deadline is too short, raising the paid-up capital requirement was necessary.”