The successful completion of Constituent Assembly (CA) is likely to make immediate impact on stock market and the process of implementing development budget, according to economists.
“If a stable government is formed after the CA election, the process of implementing budgetary programs will be smooth,” Dr Bishwambher Pyakuryal, senior economist, told Republica. He further said formation of stable government after the election will create favorable business environment in the country.
“Both domestic and foreign investors will be encouraged with the new political government,” Pyakuryal said, adding that positive political development will bring more Foreign Direct Investment (FDI) commitment.
Keshav Acharya, another economist, said the immediate impact of the formation of a stable government will be felt in the stock market. “Our stock market has already shown positive impact and it will improve further in the coming days. The pace of development spending also will also increase once the new government is formed,” said Acharya. “The successful CA election will also create an environment to boost economic growth, bring down trade deficit and increase investment in the country.”
However, Pyakuryal and Acharya are still not confident that political parties will able to form government immediately after the election. They also said inflation will go up in the coming days as tens of millions of rupees have been spent during the election increasing the flow of money into the market.
“Additional flow of money into the market will increase inflation. The new government should immediately take necessary step to check the price rise,” added Acharya.
The government has allocated Rs 16 billion for the election of which Rs 11 billion has already been released. As per the conservative estimate, Rs 50 billion has been spent by the government, political parties and their candidates for the election.
“Low domestic production and increase remittance flow will also increase inflation,” said Pyakuryal.
The government has set a target to limit inflation at 8 percent in 2013/14.
Source: Republica, 19 Nov 2013
“If a stable government is formed after the CA election, the process of implementing budgetary programs will be smooth,” Dr Bishwambher Pyakuryal, senior economist, told Republica. He further said formation of stable government after the election will create favorable business environment in the country.
“Both domestic and foreign investors will be encouraged with the new political government,” Pyakuryal said, adding that positive political development will bring more Foreign Direct Investment (FDI) commitment.
Keshav Acharya, another economist, said the immediate impact of the formation of a stable government will be felt in the stock market. “Our stock market has already shown positive impact and it will improve further in the coming days. The pace of development spending also will also increase once the new government is formed,” said Acharya. “The successful CA election will also create an environment to boost economic growth, bring down trade deficit and increase investment in the country.”
However, Pyakuryal and Acharya are still not confident that political parties will able to form government immediately after the election. They also said inflation will go up in the coming days as tens of millions of rupees have been spent during the election increasing the flow of money into the market.
“Additional flow of money into the market will increase inflation. The new government should immediately take necessary step to check the price rise,” added Acharya.
The government has allocated Rs 16 billion for the election of which Rs 11 billion has already been released. As per the conservative estimate, Rs 50 billion has been spent by the government, political parties and their candidates for the election.
“Low domestic production and increase remittance flow will also increase inflation,” said Pyakuryal.
The government has set a target to limit inflation at 8 percent in 2013/14.
Source: Republica, 19 Nov 2013
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