Why Nepalese government in deficit in 2023
There can be several reasons why the Nepalese government is in deficit, some of which are: • High government spending: The government may be spending more than it is earning, which can lead to a deficit. This can be due to high expenditures on salaries, pensions, subsidies, and infrastructure development. • Low tax revenues: The government may not be able to collect enough taxes to cover its expenses. This can be due to a low tax base, tax evasion, or ineffective tax administration. • Economic downturn: A recession or a slow economic growth can reduce government revenues while increasing government expenditures on social welfare programs such as unemployment benefits. • Debt servicing: If the government has borrowed money, it may have to spend a significant amount of its revenue to pay back the principal and interest on those loans. • Political instability: Frequent changes in government or political unrest can negatively impact the economy, reducing foreign investment and economi...