New Delhi, Feb.3 - The International Monetary Fund (IMF) is creating conducive economic policy making environment for economic growth in Nepal.

It has been playing an active role in giving a major push to Nepal's economy which has shown signs of improvement recently. Years of political instability took a heavy toll on the economy of one of the most poorest countries of the world.

The IMF is an organization with 188 member countries. The main aim is to foster economic growth by lending money, providing macro-economic assessment and technical assistance to the governments and central banks of the member countries.

The IMF began working with Nepal by extending training and technical assistance to the staff of the central Rashtriya bank, Ministry of Finance and statistical authorities.

According to IMF's annual report, Nepal's GDP expanded to 5.48 percent in 2014 from the previous year. The GDP annual growth rate in Nepal averaged 4.40 percent from 1994 until 2014. But as Nepal is striving to conclude the peace process by helping draft a new constitution, business sentiments have improved considerably raising hopes of a faster recovery.

"Our broad assessment of the Nepalese, macroeconomics is pretty stable and pretty soundly managed despite the fact there is lot of political instability for many years, right, Nepal's assets have been lucky well managed in the context that really difficult situation. The balance of payment that currently counters the balance of payments that exports minus imports that's balance of payments is generally been pretty favorable but it is favorable partly because it relies heavily on remains of the Nepalese citizens working abroad, lots of Nepalese citizens working abroad in India where we are now, in gulf, in Malaysia, Korea", said Dr. Thomas J. Richardson, Senior Resident Representative in India and Nepal, International Monetary Fund.

Nepal has a huge potential for hydro power growth. But it has failed to capitalize on it in the absence of investments. Last year, Nepal began exploiting the untapped hydropower resources by signing the biggest foreign investment deal in its history with India to build a 1.4 billion dollars project on the Karnali river. Once the project is commissioned, Nepal will not only be exporting electricity to India but will also help end its local power shortages.

"We see some scope for that particularly of power generation that is going so we place lot of weight on stepping up budget execution of the capital budget because that has been very slow and we think there is lot of scope for developing Nepal's hydro power capacity to alleviate the load shedding problem they face which is really severe for this time of the year. That is the big impediment to growth and we are really supportive of that," Dr. Richardson.

Being one of the least developed countries in the world, Nepal relies extensively on foreign aid, largely from India, China and global monetary organizations. IMF foresees a great potential for Nepal to harness its hydro power capability and sell the electricity generated to countries like India.

"Personally, I am very optimistic about Nepal's prospects. I think, interestingly, Nepal is located in a unique ... between two gigantic countries. There is lot of potential for a bridge for trade between India and China. Hydro power capacity is huge," said Dr.Richardson.

The IMF is supportive of exploiting Nepal's hydro power in a sustainable manner that will have positive implications in the growth and livelihood of the people over the coming years.

(ANI)