Implementing Confidence-building Measures a must for Progress : Panel Discussion : : 8th Newbiz Business Conclave And Awards

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Implementing Confidence-building Measures a must for Progress  : Panel Discussion : : 8th Newbiz Business Conclave And Awards

The economy is undergoing evolution marked by a shifting GDP pattern: a decline in the primary and secondary sectors alongside expansion in the service sector. Simultaneously, digitisation and the emergence of the gig economy are on the rise, contributing to significant transformations. Furthermore, a decreasing population growth rate is reshaping our demographics, while migration is also affecting the male-female ratio. While youth out migration is fueling demand and growth, it is also creating a crisis in finding suitable candidates for jobs. Per capita income growth is reshaping our consumption patterns. Despite economic stress in many sectors, tourism and IT present hopeful prospects amid the challenges. Banks are hesitant to lend despite having available funds. This has worsened liquidity crises for businesses. Overcapacity in industries has become a matter of significant concern, driven by a tendency to overcrowd lucrative sectors. As a result, the overall market size is diminishing, while heightened competition is squeezing revenue models for businesses across the board.

Investment, whether domestic or foreign, has remained stagnant primarily due to low confidence in the business sector. No one is confident to put in money in businesses. It is necessary to implement confidence-building measures for progress. However, despite the overall stagnancy, there are observable investments, particularly in the high-end hotel sector. The entry of several hotel chains into Nepal has sparked a debate over whether we need these many hotels. Nevertheless, their marketing endeavours might attract higher-quality tourists which would potentially benefit our tourism industry. Although tourist arrivals are returning to 2019 levels, it still remains inadequate for the industry. However, there is a positive trend exemplified by a hotel property selling at $1500 per night. This indicates the potential for quality tourism growth in Nepal. Quality tourism, if delivered well, can bring a lot of high-spending tourists to Nepal. Low demand in the market has led to a decline in imports and exports. This has been further exacerbated by demographic shifts. Although forex reserves have rebounded, the government restrictions on imports two years ago hit business confidence which led to negative market trends. The government's preparation to host an investment summit and make legal reforms to attract investments is a positive move. I am optimistic that these initiatives will attract foreign investors and elevate Nepal's position on the global investment map. 

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