EFFECT OF MACRO ECONOMIC INDICATORS ON ECONOMIC GROWTH OF NEPAL

The analysis highlights the connection between Nepal's money supply and economic growth, analysing their long run effects along with other key macroeconomic variables such as inflation, exports and imports. An increase in the money supply may stimulate consumption and investment, but if it is not well managed, it may lead to inflation, which would reduce purchasing power and create economy instability. While excessive inflation decreases saving and trust, moderate inflation can promote growth. While excessive imports may affect domestic sectors and increase the trade deficit. Exports are necessary to create jobs, production and collect foreign exchange. To achieve sustainable economic growth, Nepal needs to manage a balance between supporting goods monetary policies, reducing inflation rate and imports, promoting export of organic and value-added products to avoid inflation and encourage domestic business. The dependence of macroeconomic indicators suggest that no single issue should be taken into account independently when developing economic policy. Nepal needs a well-coordinated macroeconomic framework that includes monetary, industrial, trade, and fiscal policy. The efficacy and involvement of policymaking can be enhanced by constantly evaluating the interrelated factors data-driven techniques. The study identifies key macroeconomic indicators; it is crucial to align these with goals for reasonable and sustainable growth. Issues like young unemployment, environmental sustainability, and regional inequality should all be addressed via economic growth doesn’t come at the expense of long-term resilience and that its advantages are distributed equitably.

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