IMF国际货币组织全球-Nepal_Request-for-Disbursement-Under-the-Rapid-Credit-Facility_42页_1mb

Nepal - Request for Disbursement Under the Rapid Credit Facility

Core Content Overview

The IMF Country Report No. 20/155 outlines Nepal's request for disbursement under the Rapid Credit Facility (RCF) to address the economic impact of the COVID-19 pandemic. The report includes a Press Release, Staff Report, and a Statement by the Executive Director, emphasizing the urgent need for financial support to stabilize the economy and support the pandemic response.

Main Points

Context and Impact of the Pandemic

• The COVID-19 pandemic has severely impacted Nepal's economy, especially through the decline in remittances, tourism, and domestic activity.
• Remittances, a major source of foreign exchange, fell significantly due to travel restrictions and lower earnings abroad.
• Tourism, a key sector, collapsed as international flights were halted and movement restrictions were imposed.
• Construction and trade services also faced disruptions, with delays in projects and reduced trade activity.
• The current account deficit is expected to widen to 7.6 percent of GDP, and fiscal deficits are projected to rise to 7.2 percent of GDP.

IMF Disbursement

• The IMF Executive Board approved a disbursement of US$214 million (SDR156.9 million) under the RCF to help Nepal address the balance of payments and fiscal needs caused by the pandemic.
• This is the 50th emergency financial assistance request by the IMF to support member countries dealing with the pandemic.
• The disbursement is expected to catalyze additional support from Nepal's development partners.

Government Measures

• The Government of Nepal has taken steps to increase health spending, including providing incentive pay and insurance to frontline medical workers.
• They have also implemented social assistance programs to support the most vulnerable, including daily food rations and subsidized utility bills.
• Liquidity measures have been introduced to ensure the stability of the financial system and support access to credit.

Macroeconomic Stability

• The pre-pandemic policy mix, including modest fiscal deficits and macroprudential measures, helped maintain macroeconomic stability.
• The IMF staff supports the RCF disbursement, noting that public debt is at low risk of distress and there is adequate capacity to repay the Fund.
• The authorities remain committed to inclusive growth while preserving financial sector stability and fiscal sustainability.

Key Information

Economic Indicators (FY2017/18–FY2024/25)

• Real GDP growth is projected to decline from 6.7% (FY2017/18) to 5.2% (FY2024/25).
• Headline CPI is expected to rise, reaching 7.5% in FY2019/20.
• Fiscal indicators show an increase in fiscal deficit and a wider current account deficit.
• Gross official reserves fell from US$8.7 billion (FY2019/20) to US$7.0 billion (FY2020/21).
• Public debt is projected to increase from 30.2% of GDP (FY2017/18) to 47.8% of GDP (FY2024/25).

Financing Needs

• External financing need: 3.0% of GDP (FY2019/20).
• Fiscal financing need: 2.6% of GDP (FY2019/20).
• Total financing gap: 5.6% of GDP (FY2019/20), with 2.1% of GDP from pre-COVID financing and 4.1% of GDP from domestic financing.

IMF Role and Support

• The IMF disbursement is expected to catalyze additional financing from development partners.
• The RCF disbursement is part of the debt service relief measures approved under the IMF's CCRT.
• The IMF supports the request, emphasizing the importance of good governance and transparency in managing financial assistance.

Policy Discussions and Recommendations

• The IMF team held discussions with Nepal authorities via video conferences in April 2020.
• The IMF encourages Nepal to remain committed to inclusive growth and resilience while addressing external pressures.
• Strengthening good governance and accountability is recommended to ensure the effective use of financial assistance.
• The IMF also emphasizes the need for additional support from development partners to close the remaining balance of payments gap and ease the fiscal situation.

Conclusion

The IMF's support under the RCF is a critical measure to help Nepal manage the economic fallout of the pandemic. The disbursement is expected to fill immediate financing needs and stimulate further support from international partners. The government's proactive measures in health, social assistance, and liquidity are well-received by the IMF, and continued commitment to macroeconomic stability and fiscal sustainability is strongly advised.