Experts Urge Leveraging Nepal's Sovereign Credit Rating for Economic Growth

Stakeholders from Nepal’s economic sector have emphasized the need to capitalize on the country’s first-ever sovereign credit rating, a 'double B-minus' score. Speaking at an interaction titled Managing the Economy, organized to mark the 28th anniversary of the Society of Economic Journalists of Nepal (SEJON) in Kathmandu, experts highlighted the opportunities presented by this milestone.

Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel described the achievement as a matter of national pride, placing Nepal second in South Asia after India. He stressed the importance of converting potential into tangible results, pledging accountability for any economic setbacks under the current government.

National Planning Commission Vice-Chair Prof. Dr. Shivaraj Adhikari noted that Nepal’s sovereign rating has sparked positive discussions. However, he called for a shift toward actionable reforms, pointing out the need for solutions beyond traditional debates. He highlighted recent economic developments, such as reduced interest rates and increased liquidity, as opportunities to stimulate growth.

Nepal Rastra Bank Governor Maha Prasad Adhikari acknowledged the challenges despite the favorable rating. He underlined that improving Nepal’s sovereign credit status requires concerted efforts from all state agencies, rather than relying solely on monetary policy adjustments. He also noted that no changes were made in the first-quarter review of the monetary policy due to similarities in the economic situation compared to the past.

Economist Prof. Dr. Achyut Wagle raised concerns over declining revenue collection, which has dropped from 24-25% of GDP to just 12-13%. He warned that growing public debt, projected to reach 60-65% of GDP in the coming years, poses a significant threat to Nepal’s fiscal stability. Wagle attributed these challenges to inadequate financial management and the failure to explore new revenue streams.

The interaction highlighted the importance of turning Nepal’s sovereign credit rating into an opportunity for meaningful economic transformation while addressing persistent structural challenges.