Economic Efficiency

A given economic arrangement is efficient if there can be no rearrangement which will leave someone better off without worsening the position of others. One important aspect of overall economic efficiency is productive efficiency. Productive efficiency occurs when an economy cannot produce more on one good without producing less of another good.

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The Crossroads of the Nepalese Economy in 2026 AD

Forecast: Nepal's economic outlook for 2026 presents a mix of forecasts from major international institutions like the International Monetary Fund (IMF), World Bank, and Asian Development Bank (ADB). These forecasts reflect a blend of optimism regarding structural resilience and concerns over ongoing political and social instability. The ADB projected a 5.1% GDP growth for 2026 in April 2025, driven by the revival of tourism and improved agricultural productivity. However, the World Bank later forecasted a 2.1% GDP growth for 2026 in November 2025, indicating a significant slowdown due to political unrest and weakened investor confidence. The IMF projected moderate GDP growth continuing the recovery around 4.3 to 4.5%. The economic recovery is stabilizing but faces challenges due to a complex domestic environment and global uncertainty. Underlying Reasons: The divergent predictions stem from various factors. The unexpected youth movement, known as the "Gen Z uprising,...

Let's discuss the government budget

A government budget is a financial plan that outlines the revenues and expenditures of a government for a specific period. It is a crucial tool for managing a country's finances efficiently to achieve economic and social goals like promoting growth, reducing poverty, and providing public services. Monitoring and adjusting the budget as needed is essential for fiscal stability and sustainability. In Nepal, the tradition of presenting an annual budget dates back to the 1950s, with the first budget presented in 1951 covering the period from March 1951 to February 1952. This change followed the overthrow of the Rana regime in February 1951. During this transitional phase without a legislature, the first budget was presented at the end of the year BS 2007 through Radio Nepal. The budget amount was Rs. 52,529,000, with a tax collection target of Rs. 30,619,000. The then Finance Minister, Subarna Shamsher, presented the budget as part of the council of ministers led by Prime Minister Mat...

Five Major Economic Vulnerabilities and Structural Weaknesses of Nepal

Nepal faces a multitude of challenges in transitioning into a developing nation. These obstacles include political, economic, social, infrastructural, and environmental issues that hinder its graduation from the category of Least Developed Countries (LDCs). Let's discuss five key economic vulnerabilities that Nepal needs to address in order to advance towards becoming a middle-income economy. 1. Agricultural Dependency: The country's economy is largely dependent on agriculture, which is susceptible to natural disasters such as floods, droughts, and earthquakes. The reliance on subsistence agriculture exposes a large portion of the population to climate risks, low productivity, and limited market access. 2. Remittance Reliance: Nepal heavily relies on remittances from its citizens working abroad, which makes the economy vulnerable to fluctuations in global economic conditions and policies. Remittances from Nepali workers abroad account for over 25% of GDP, posing vulnerability t...

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