Economy to grow 5.89 percent to a little over Rs 3 trillion
KATHMANDU, April 26: Each Nepali will earn an average of US $ 1,004 (Rs 106,333 as per Wednesday's exchange rate) in the current fiscal year, which ends in mid-July. The per capita income has reached four digits because of vibrant activities in reconstruction, the boom in service sectors like hotels and more electricity generation, among other factors, according to the Central Bureau of Statistics. The per capita income is calculated based on the Gross Domestic Product. GDP will increase by 5.89 percent, against the base price of 2001, to reach a little over Rs 3 trillion, up from Rs 2.6 trillion.
The increment in per capita income can help Nepal graduate to the status of a developing country in the next three years. The Government deferred the status earlier this year although the other social indicators have already been met. However, the growth forecast by all development partners including the Asian Development Bank and the International Monetary Fund remains below 5 percent.
Pathway to prosperity
Per capita income last year was US $ 866 as per revised CBS statistics. Speaking at a press meet held to make public the 'national accounts statistics of Nepal', Director General of CBS Suman Raj Aryal said, “Annual average income of each Nepali is projected to reach four figures this fiscal year.”
The growth in per capita income is also due to the growth in production of goods and services and a slower population growth rate of below 2 percent, added Aryal.
The growth in GDP is however going to be lower than last fiscal year (7.39 percent as per recently revised statistics) following the 2015 earthquake coupled with the Indian blockade.
Agriculture is to grow only 2.82 percent compared with 5.20 percent last fiscal year because paddy production which accounts for about a fifth of total agricultural output fell by 1.5 percent while lentils also saw a decline of 2.5 percent. However, maize and wheat production saw growth of 9.4 percent and 5 percent respectively from 6.88 percent and 7.14 percent.
The non-agriculture sector saw a slower growth of 7.10 percent from 8.50 percent the previous fiscal year. But the manufacturing sector is expected to grow by 8.04 percent while electricity and drinking water are projected to see an increment of 5.82 percent. The construction sector is to see a robust growth of 10.64 percent because of reconstruction work as well as progress in the Melamchi Water Supply and Upper Tamakoshi Hydropower projects.
Likewise, the hotel and restaurant sector will see a whopping growth of 9.77 percent because of a 24 percent growth in foreign tourist inflow to 940,218 tourists. Likewise, the wholesale and retail sector is projected to grow by 9.06 percent.
Commenting on the growth forecast, former finance minister Ram Sharan Mahat said that this growth was expected because agricultural production growth, except for a marginal fall in paddy output, had taken place despite flood damage. Another factor driving growth was speeded up reconstruction work. “In terms of per capita income, we are the lowest in South Asia and therefore we still have a long way to go,” added Mahat.
“The growth this year came mostly from mining, wholesale and retail, construction, hotels and restaurants and public administration. I think our growth next fiscal year also will be over 6 percent because mining, tourism, manufacturing and electricity will grow at a higher rate then,” said Rameshore Khanal, former finance secretary. Khanal further said, “As the share of agriculture is going down, even bad weather will not dampen growth. Another encouraging trend this year is that the share of domestic savings and gross capital formation have increased, which will help accelerate growth in the coming years.”
