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%.
(Reporting by Gopal Sharma; Editing by Sharon Singleton)
