Demand for manufacturing and agricultural products has fallen sharply in the past two months: CNI study report – myRepublica

KATHMANDU, July 13: The trading volume of the country’s major industries has fallen sharply in the past two months due to the excessive surge in market prices, depressing people’s purchasing power, a study report shows unveiled by the Confederation of Nepalese Industries (CNI).

According to the private sector umbrella organization, in the two months of May and June this year, revenue collection from brick kilns fell by 80% due to a drop in demand triggered by the economic downturn. Similarly, sales of cement and vegetable oils and refineries fell by 60%.

Similarly, sales of agricultural products, technical equipment, edible products, livestock products, rice and steel rods and wires fell by more than 30%. The CNI conducted a survey of 38 manufacturing and agricultural products during the review period.

The confederation has asked the Nepal Rastra Bank (NRB) to introduce monetary policy to tackle the stagflation issues that the economy is likely to face in the near future. Shortage of loanable funds, deteriorating balance of payments, global geopolitics and soaring consumer goods prices have led the economy to a massive fall in aggregate demand, which is the major challenge for the Nepalese economy. at present, the report reads.

In its wish list to NRB, the CNI urged the central bank to reduce the risk weighting from the existing 150% for industries that use bonded warehouse facilities. The apex organization has also asked the central bank to reschedule and restructure loans for affected industries, without applying additional provision amid geopolitical and supply chain disruptions.

Industries should be allowed to invest abroad at least 10% of their net profit after tax, according to the CNI. The establishment of a Rs 10 billion fund for the promotion of the productive and service sectors, the provision of government guarantees and unsecured loans to small and medium industries and the increase in the maximum limit of subsidized loans to agriculture from the existing 50 million rupees to 150 million rupees are among the demands of the CNI to deal with the current downturn in the economy.

The CNI has also asked the central bank to make it compulsory for each branch of commercial banks to provide loans to at least five agro-industrial enterprises. The implementation of the offer of subsidized loans for returning migrants could also help to use the money earned from remittances, according to the CNI.

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