. on the external sector front, both exports and imports dropped by 17. 8 percent and 0. 1 percent respectively, leading to a small expansion in trade deficit by 2 percent to usd 6. 61 billion in fy 2015 / 16. however, exports rebounded by 9. 8 percent while imports surged by about 34. 9 percent during the ten months of the current fiscal year, further widening the trade deficit by 37. 5 percent. the export - import ratio has declined to 7. 5 percent arising from high growth of imports compared to slower growth of exports in the review period. still, improvements in the service incomes, grants and remittance inflows have contributed in marginal surplus in current account. 7. the overall balance of payments registered a surplus of usd 1. 78 billion in fy 2015 / 16 and usd 504 million during the ten months of fy 2016 / 17. lower current account surplus emanating from increased imports and lower remittance inflows were the principal contributing factors to the current balance of payments situation. consequently, the gross foreign exchange reserves of the banking system surged by 17 percent to us $ 10. 31 billion as on mid - may 2017. based on the trend of imports of the first ten months of the current fiscal year, the existing level of reserves is sufficient for financing merchandise imports of more than 13. 2 months and merchandise and service imports of more than 11. 4 months. fellow governors and distinguished delegates, 8. monetary aggregates are within the expected level in the current fiscal year. broad money ( m2 ) increased by 10. 4 percent during the ten months of this fiscal year compared to a growth of 12. 3 percent in the corresponding period of the previous year. bank credit to the private sector grew at a rate of 16. 6 percent this year. on the other hand, deposit mobilization of depository institutions increased by 9. 3 percent during this year compared to a growth of 11. 9 percent in the previous year. 9. in the fiscal sector, a higher rate of growth in resource mobilization relative to government expenditure led to a surge in budget surplus during the review period. the country remains low indebted, as outstanding total public debt, both domestic and foreign, accounts for 24. 1 percent of gdp. 10. nepal ’ s financial sector has grown by leaps and bounds since the economy was liberalized in the 1990s. yet, financial services have not become much effective till date. also, the growth of this sector

to the benefits received. this contributes to increased investment and augments the productive base, thereby facilitating the financing of social security expenditure commitments. apart from specific reforms in the social security system itself, an improvement in the fiscal position would have an overall positive macroeconomic effect, compensating in part for the addition in aggregate demand brought about by ageing. the lower absorption of resources by the state could also lead to a higher average level of productivity and to an improvement in the country ’ s balance of payments. productive capacity would also be enhanced if the state creates fiscal and other incentives for individuals to provide for their own needs after retirement, leading to an increase in the household saving rate and, consequently, also to a faster accumulation of capital. fiscal consolidation will, however, only solve part of the problems created by population ageing. the negative supply shock caused by this phenomenon must also be countered by a positive shock. supply - side reforms aimed at increasing the availability and the efficient use of economic resources are, therefore, essential. the efficiency of markets can be improved by implementing a vigorous competition policy and reducing public sector involvement in the economy. productive capacity would also be improved through such policies as market liberalisation, greater investment in infrastructure and education, and a market - driven industrial policy. structural rigidities in the labour market must be eliminated in order to decrease their disincentive effects in terms of the labour supply and the work ethic. a labour market policy intended to increase skills, and consequently the employability of individuals, is also desirable. conclusion this “ grey cloud ” on the horizon, therefore, appears to have a silver lining in the form of appropriate policy responses that would effectively enhance the welfare of populations. moreover, as the secretary - general of the united nations, kofi annan, has said : “ trees grow stronger over the years, rivers wider. likewise, with age, human beings gain immeasurable depth and breadth of experience and wisdom. that is why older persons should be not only respected and revered ; they should be utilized as the rich resource to society that they are. ” the wealth of skills and experience that older people bring to the workplace, to public life and to the family are generally not recognized. technological advances and new ways of organizing society can be put to good use to increase the participation of older people in work and to make appropriate socio - economic changes.