IMF: Nepal must keep inflation close to India levels

Nepal should keep inflation close to levels in India so that the country’s competitiveness is not lost by way of the “inflation wedge”, an IMF study says. Nepal’s economy was hit by a massive earthquake early this year and is facing unrest and disruptions to economic activity owing to protests by minority groups over the new Constitution.

According to IMF, Nepal’s economic growth slowed to 3.4 per cent in 2014-15, down from 5.5 per cent in 2013-14. While losses in agricultural production and damage to transport systems pushed up prices, raising inflation to about 7 per cent, said Geert Almekinders.