GDP growth rate lowest in a decade

The Central Bureau of Statistics (CBS) Wednesday estimated that the country's Gross Domestic Product (GDP) growth rate would be about 0.77 per cent this year, lowest in the decade.

With this, the size of Nepal's economy will be Rs. 2007 billion at basic prices. The size of economy last year was estimated Rs. 1,889 billion.

The national statistics agency informed that the GDP at basic price this year would be 0.77 per cent while it revised the growth rate for the previous fiscal year to 2.32 per cent and declared the economic growth rate of 5.72 per cent for the Fiscal Year 2013/14.

The country witnessed the lowest economic growth rate, 0.16 per cent, in 2001/02.

The CBS prepared its estimates on the basis of four to nine months national statistics and economic information, stated Suman Raj Aryal, director general of the CBS.

According to the CBS estimates, primary sector, which includes agriculture and forestry, fishing and mines and quarrying, will have 32.28 per cent contribution to the GDP which is 1.22 per cent higher than the previous year.

Likewise, secondary sector, comprising manufacturing, construction and electricity, gas and water, will contribute 13.43 per cent to the GDP. Secondary sector gross value addition will be shrunk by 6.3 per cent in the current fiscal in comparison to the previous year.

However, the tertiary sector, the largest contributor to the GDP, will experience 2.67 growth rate to reach 54.29 per cent this year.

This sector includes wholesale and retail trade, hotels and restaurant, transport, storage and communication, financial intermediation, real estate, renting and business activities, education, health and social work, and other community, social and personal service activities.

Of the 15 industry sectors that contribute to the nation's GDP, CBS estimated that all secondary sectors would see negative growth rate.

"As the government put sanction on house construction after the earthquake mining and quarrying was badly affected. Likewise, the quake damaged some of the hydroelectricity projects. Therefore mining and quarrying, construction and electricity, gas and water saw the negative growth rate of 6.54 per cent, 3.98 per cent and 1.66 per cent respectively," informed CBS director Ishwori Prasad Bhandari.

He also said that as the industries couldn't import raw materials and factories in the Terai region were shut for about four months due to Terai unrest, manufacturing sector's growth rate would be shrunk by 9.86 per cent.

Another director Dr. Jishnu Mohan Bhattarai said that the per capita GDP by the end of this year would be around Rs. 79,370 which is 4.63 per cent higher than the last fiscal.

Similarly, CBS estimated that the per capita income would reach Rs. 80,921 this year from Rs. 77,079 last year.

Dr. Bhattarai said that capital formation by the private sector slumped massively to negative growth of 17.53 per cent while government capital formation increased by 10.5 per cent.

Deputy director general of the agency Dr. Rudra Suwal expressed serious concern over the low national saving. "Consumption has been increased because of the increased disposable income."

The national saving is about Rs. 6 out of Rs. 100.