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Nepal’s outbound spending surpasses inbound tourism revenue, highlighting economic leakage

Recent data from the Nepal Rastra Bank (NRB) has revealed that Nepalis are spending nearly two and a half times more on international travel than the revenue generated from foreign tourists visiting Nepal. By mid-April of the current fiscal year 2023/24, foreign tourists contributed Rs 60.45 billion to Nepal’s economy, marking a 40 percent increase from the same period last year.

However, the primary source of foreign exchange in Nepal remains remittances from Nepalis working abroad, which amounted to Rs 1.82 trillion by mid-April this year. This stark contrast between tourism revenue and remittances underscores the critical role of remittances in Nepal’s economy, with tourism revenue accounting for just 5.6 percent of total foreign exchange earnings.

The imbalance between outbound and inbound travel expenditures highlights a significant economic leakage in Nepal. This calls for a more robust strategy to leverage the potential of tourism and reduce the reliance on remittances for economic stability.

In other news, the Nepal Stock Exchange (NEPSE) saw a 52.53 point increase last week, resulting in investor gains of Rs 84 billion. This uptick followed the government’s decision to reduce stock brokerage commission fees, indicating a positive impact on investor sentiment and market activity.

Additionally, the government has approved the ‘National Startups Policy, 2080’, which includes a 10-year income tax waiver and simplified loan access for startups. These measures aim to boost investment in innovative enterprises and contribute to economic development. However, the success of the policy will depend on effective implementation and the ability of startups to leverage these incentives for sustainable growth.