News of the Week: Signs of Recovery in Economy

American Ambassador Moriarty: “????????? ????????? ????? ??? ????????? ?? ? ??????? ??????? ???????????? ????? ??????? ?????? ?? ???????? ????? ????? ????????? ??????? ????????????????? ???????? ??? ? ?, ?? ???????? ??????? ????? ?????? ? ?” (here is the speech)

By Prem Khanal in the Kathmandu Post

[The news we like in the media!]

KATHMANDU- As the prospect of lasting peace rapidly materializes in the country, a glimmer of light in the conflict-wracked economy has started flickering, albeit with some black spots still remaining. As an early indication of the revival of the market, which has been in deep recession for the last two years, there has been an increase in the number of shoppers and more sales, ushering a ray of hope in the fragile economy.

Though the country has no reliable measurement to gauge consumers’ confidence, market activities show that demand for goods, the main stimulator of economic revival, has improved encouragingly in recent months.

“Yes, sales are picking up and the responses of consumers are also encouraging,’ said Binod Tuladhar, executive director of Bluebird Department Store, one of the leading retailers in the capital. Ramesh Shrestha, chief of LG marketing of Chaudhary Group told the Post that sales of durable electronic goods, mainly television and refrigerators, has gone up by around 20 percent lately, a major indicator of rising consumer confidence.

The positive signals are not just with the big outlets, it also has trickled down to the retail level. Pabitra Bajracharya, president of Nepal Retailers’ Association echoed Tuladhar’s tone and added that the market is highly optimistic. The latest unprecedented boom in the share market is another strong indication reflecting improving investor confidence. The NEPSE index, which was hovering around 300 marks a year ago, has rallied to 500 points and market capitalization has also doubled during the last one year.

Latest government statistics also clearly indicate that the major pillars of the economy are warming up to take bold steps towards economic recovery. The total revenue of the government recorded a robust growth of 20 percent during the first four months of the current fiscal year to Rs 21.52 billion. The revenue growth rate is higher than the budgetary target of around 15 percent.

Impressively, the robust growth of 35 percent in Value Added Tax (VAT), which is mainly levied on consumption of goods and services, is a testimony to the fact that consumer confidence is improving and consumers are spending more money. “Healthy revival of domestic consumption due to prospects of peace has pushed up revenue collection,” said Rameshore Khanal, revenue secretary at the Ministry of Finance.

Financial institutions have also started feeling the changing economic scenario. The increase in flow of aspiring borrowers indicates that the market is highly positive, Radhesh Pant, president of Nepal Bankers’ Association said. Along with increased customers, new and innovative projects, which had become a rare case in the financial market in recent years, are again emerging, said Sudhir Khatri, CEO of Development Credit Bank Limited.

However, not all sectors show the same twinkling. Shrinking capital expenditure, which is mainly used to finance development activities, is a concern that has towered above all. Latest government figures show that actual development expenditure during the first four months of the current fiscal year contracted by over 17 percent to Rs 1.81 billion, as compared to the same period last year.

The amount expended during the period was 4 percent of the capital budget planned for current year. Vice Chairman of the National Planning Commission, Dr Jagadish Chandra Pokharel, blamed the delay in materializing of the proposed all-party committee at the local level as the main cause in low volume of expenditure.

And here is another report: 979,227 is the number of Mobile phones in Nepal

Mobile phone lines overtake fixed lines

Nov 29- The number of mobile phone subscribers has surpassed the number of customers subscribing to fixed line service, thanks to easy availability of cell phone lines at affordable prices. A total of around 979,227 mobile phone lines were distributed all over the country till the first three months of the current fiscal year, compared to around 576,693 fixed phone lines issued during the same period.

With this, total number of telephone subscribers, including cell phone and fixed phone, has reached 1,555,920. This has increased combined teledensity of the country to 6.038, meaning that 6 in every hundred people in average have phone connectivity.

Statistics show that of the total lines distributed till date, more than 77 percent or 1,203,920 lines were issued by NT. The state owned telecom issued a total of 675,884 pre-paid and post-paid lines, operating on GSM technology and 3,343 pre-paid lines with limited mobility, operating on CDMA technology all over the country till the first three months of the current fiscal year. NT is currently providing cell phone service in 40 different districts of the country, of which, more than 50 percent are operational in Kathmandu Valley.

The state owned telecom also distributed a total of 491,506 PSTN (public switched telephone network) lines, 33,022 fixed phone lines operating on CDMA technology and 165 lines operating on wireless local loop (WLL) technology all over the country.

Of the total PSTN lines issued till date, almost 54 percent or 264,042 lines are operational in Kathmandu valley. NT currently has a capacity of distributing up to 317,624 PSTN lines in the valley. The telecom, at present, is distributing PSTN lines through 226 exchanges located in 72 districts. If the official data is anything to go by Spice Nepal Private Limited (SNPL), the first private cell phone service provider of the country, is slowly emerging as an aggressive competitor to NT. The company, which started providing cell phone service from September 17, 2005, distributed a total of around 280,000 pre-paid and post-paid lines till the review period, of which around 2,600 were post-paid and the rest pre-paid.

United Telecom Limited (UTL), first private basic phone service provider, which was given permission to issue mobile phone lines with limited mobility earlier this year, also distributed a total of 20,000 handsets operating on CDMA technology till the first three months of the current fiscal year. It also succeeded in raising fixed phone client base to 52,000 till the review period.

Mobile phone 675,884 (NT), 280,000 (Mero)
Fixed telephone 524,693 (NT), 52,000 (UTL)
Limited mobility 3,343(NT), 20,000(UTL)