The government of Nepal has been adjusting its budget balance in response to economic cycles. They have been spending more during economic downturns and cutting back during upswings, which is good for stabilizing the economy. This counter-cyclical approach was stronger in the 2000s but weakened slightly in 2011-13. To improve stability, Nepal should focus on automatic stabilizers like broadening tax bases and social safety nets rather than relying on discretionary fiscal actions.