KATHMANDU, MAY 28: The gross investment of Nepal is expected to grow by 18.1 percent in the current fiscal year, way down from 29.3 percent last year.
According to the Economic Survey unveiled by the Ministry of Finance on Saturday, the gross investment is estimated to hit Rs 1.807 trillion in the fiscal year 2021/22 that will end in mid-July. The decline in the growth rate of investment has been attributed to the low capital expenditure of the government and ongoing liquidity shortage that has grappled the country’s banking businesses for almost around 10 months.
Amid slow increase in the gross capital formation, the generation of fixed capital goods is even more pathetic. The fixed capital formation is expected to grow by mere 11.6 percent to Rs 1.425 trillion in 2021/22, shows the Economic Survey.
Due to a slow increase in the investment amount, the ratio of gross fixed capital formation to the country’s gross domestic product (GDP) is expected to remain at 29.4 percent, down from 29.9 percent. Small increments of fixed capital goods will lead to the slow economic development of a country, according to economists.