Madhesh Province contributes more than 13 percent to the country’s GDP: NRB report

Published On: January 6, 2024 08:00 AM NPT By: Republica | @RepublicaNepal

Agricultural outputs and tourism business are among the main contributors to the province’s GDP

KATHMANDU, Jan 6: The gross domestic product (GDP) of Madhesh Province is expected to grow by 1.69 percent to Rs 707 billion by the end of the current fiscal year.

A study report on ‘Economic Status of Madhesh Province’ unveiled by Nepal Rastra Bank (NRB), shows that the increase in the province’s gross domestic output will be due to an increase in its agricultural production. Similarly, the tourism business in the region has also increased significantly.

The NRB report shows that the Madhesh Province will share 13.13 percent of the country’s GDP in the current fiscal year. Nepal is expected to have its GDP of Rs 5.381 trillion, a growth rate of 1.86 percent, in the fiscal year 2023/24.

The central bank has attributed the province’s agricultural production to increased loans provided by banks to the agriculture sector of the province. The banks and financial institutions (BFIs) provided loans of Rs 53.95 billion to the farm products of the province in fiscal year 2022/23. The loan amount in the segment stood 12.55 percent of the total lending of the BFIs, according to the NRB.

In Madhesh Province, farm products share 35.2 percent of the gross domestic output. Food crops, vegetables, fruits and spices are among the main products of this province. This year, the cultivation area of these products increased 3.16 percent to 1,037 hectares.

The report shows that the service sector has been witnessing a notable growth in Madhesh Province. In the fiscal year 2022/23, tourists inflow in the region increased by 55.37 percent, while the employment in hotel and restaurants surged 36.99 percent.

The manufacturing sector however went slow with the growth rate of only 5.23 percent. The capacity utilization of the manufacturing business stood only 54.25 percent last year. The BFIs lending in this segment increased 7.30 percent to Rs 109.59 billion.

In the review period, the BFIs collected a total deposit of Rs 296.50 billion, an increase of 13.25 percent, in the province. The overall lending increased 4.68 percent to Rs 450.21 billion.