Nepal PM names Prakash Sharan as next finance minister amid economic woes

Nepal has shored up its foreign exchange reserves after the government last April restricted imports of 10 “non-essential” goods.

Nepal’s Prime Minister Pushpa Kamal Dahal on Friday named centrist politician and economic expert Prakash Sharan Mahat as finance minister, a presidential statement said, as the country tackles falling revenue collection and high interest rates.

The 64-year-old Prakash Sharan is considered an expert on the economy. (AIR/ File )

Mahat has previously served in the foreign and energy ministries and is a member of the centrist Nepali Congress party, the biggest group in the nine-party coalition.

He replaces Bishnu Paudel of the Communist Unified Marxist-Leninist (UML) party, which pulled out of the government last month amid differences with the prime minister.

The 64-year-old is considered an expert on the economy.

Nepal has shored up its foreign exchange reserves after the government last April restricted imports of 10 “non-essential” goods.

However, its manufacturing sector has been stymied by power shortages and a lack of investment, while government revenue collection has been poor, crimping growth in the $40 billion economy.

Gross domestic product in the year to mid-July is expected to decline from the 5.8% growth recorded last year, officials told Reuters.

“The biggest challenge of the finance minister is to create a conducive atmosphere for investment and win the confidence of all stake holders including the common people,” Deependra Bahadur Kshetri, a former governor of the central bank, told Reuters.

In addition, businesses are protesting against high lending rates, which now stand at about 13% compared with 12% a year ago, demanding that interest be cut to single digits.

Annual inflation eased to 7.88% in mid-February, but this is still above the central bank target of 7%.