KATHMANDU, May 26: The total investment from the government and the private sector has been projected to decline by 3.4 percent to Rs 1.88 trillion in the current fiscal year. The government has blamed the threat of COVID-19 and measures put in place to curb it for the decline.
Unveiling the Economic Survey 2019/20 at the federal parliament on Tuesday, Finance Minister Yuba Raj Khatiwada said the increase in expenses on the preventive measures deployed by the private sector and the government against the pandemic has led to the fall in investment. While the government has failed so far to introduce a rewarding relief package along with radical programs to overcome the adverse economic impact of the novel coronavirus disease, it has blamed the ongoing nationwide lockdown enforced to contain the spread of COVID-19 for the underperforming macroeconomic indicators.
The economic survey shows that the ratio of consumption expenditure to the country’s gross domestic product (GDP) has reached 81.9 percent. It means that the country spends Rs 81.90 out of every Rs 100 of the income. Similarly, the saving to GDP ratio stands at 18.1 percent which shows very low capital formation inside the country.
Similarly, the government is unable to check unproductive expenses, which is revealed in its ever-expanding recurrent expenditure with the crawling pace of capital expenditure. In the nine months between mid-July 2019 and mid-March 2020, the government expenditure increased by 12.9 percent to Rs 610 billion, out of which only Rs 98 billion was spent on the building of infrastructures.
In the current fiscal year, the average income of the countrymen is expected to reach $1,085 per capita per year, an increase of 7.5 percent compared to that of 2018/19. In the nine months period, the government took public borrowing worth Rs 91.90 billion. The government now has a debt burden of Rs 1.13 trillion in total, of which Rs 699 billion is the external loan.
Khatiwada also claimed that the country’s economic growth rate will stand at 2.3 percent by the end of this fiscal year. The projected rate is higher than the estimate made by the Central Bureau of Statistics (CBS) and the World Bank. The CBS has estimated that the country’s growth rate in the current fiscal year will hover around 2.27 percent while the international lending organization has projected the growth rate will remain below two percent this year.