NRB raises growth estimates to 7.1%

Kathmandu, Sept. 1

The government has raised the economic growth estimates for the last fiscal year 2018/19 from earlier 6.8 per cent to 7.1 per cent.

With this, Nepal has embarked on high growth course for the last three years with more than 6 per cent growth – 8.2 in 2016/17 and 6.7 per cent in 2017/18.

Nepali economy re-bounced after reaching the lowest 0.1 per cent growth in 2015/16 due to the devastating earthquake and six-month long border blockade.

The Central Bureau of Statistics (CBS) in April this year had estimated that the Gross Domestic Product (GDP) of the country would grow by 6.81 per cent in the last fiscal.

Recent estimates of the Nepal Rastra Bank (NRB) matched with the growth estimates of the World Bank made in June. The multi-lateral donor had also projected 7.1 per cent growth for the last fiscal.

According to the NRB, the share of agriculture to the GDP has further shrunk to 27 per cent from last years'28.1 per cent while industry and service sectors' contribution has grown from 14.9 per cent to 15.2 per cent and 57 per cent to 57.8 per cent respectively.

Agriculture, industry and service sectors were estimated to grow by 5 per cent 8.2 per cent and 7.3 per cent.

NRB's annual macroeconomic and financial situation report said that the gross domestic saving to GDP stood at 20.5 per cent last year. Similarly, gross national saving to GDP was 52.4 per cent.

Similarly, the average consumer price inflation was 4.6 per cent last year, slightly up from 4.2 per cent in 2017/18. The annual average food and beverage inflation stood at 3.1 per cent and non-food and service inflation at 5.9 per cent last year against 2.7 per cent and 5.3 per cent respectively a year ago.

The Hill region witnessed the highest raise in the price of goods and services with 4.9 per cent inflation, followed by the Kathmandu Valley and Mountain region 4.9 per cent, and Terai 4.3 per cent.

At the same time, the national salary and wage rate index increased by 9.1 per cent in the last month of the fiscal.

Likewise, import of goods increased by 13.9 per cent to reach Rs. 1218.5 billion and export increased by 19.4 percent to Rs. 97.11 billion in the last fiscal. In 2017/18, export and import had increased by 25.8 per cent and 11.4 per cent.

However, the trade was more concentrated to India with 34.3 per cent higher exports and 12.8 per cent imports growth over the year. Major export commodities are palm oil, polyester yarn, jute goods, pulses and noodles. Similarly, major import goods are petroleum products, readymade garment, electrical goods, machineries and parts and MS billet.

Meanwhile, remittance inflow increased 16.5 per cent to Rs. 879.2 billion last year compared to 8.6 per cent increase in the previous year. However, the number of Nepali workers migrated for foreign employment decreased by 32.6 per cent.

Published in The Rising Nepal daily on 2 September 2019.