Kathmandu, Apr. 6
The Asian Development Bank
(ADB) has projected that Nepal's economic growth in 2022 would be 3.9 per cent
which is much lower than the government's estimates of 7 per cent.
The multilateral donor
has lowered its growth estimates for Nepal from earlier 4.1 per cent while the
government had set the high aspirations hoping that the post-COVID economic
revival and expediting development work would create the base for robust growth.
However, the growing
liquidity crisis, depleting foreign currency reserves, and sluggish progress of
large infrastructure development combined with poor spending of capital budget
have cast doubt about positive results.
Likewise, the
estimates for the growth of Gross Domestic Product (GDP) for 2023 is set at 5.0
per cent, according to the Asian Development Outlook 2022 released by the ADB
on Wednesday.
This estimate is
identical to the 5.3 per cent of developing Asia average growth rate for the
next year. South Asian average for 2022 and 2023 would be 7.0 per cent and 7.4
per cent.
Similarly, the ADB has
put Nepal's inflation rate for current year at 6.5 per cent, exactly in line
with the projection of the Nepal Rastra Bank. However, inflation is expected to
come down slightly to 6.2 per cent next year.
In South Asia, the Maldives
will witness the highest growth rate of 12 per cent this year while Sri Lankan
growth rate will remain at 2.4 per cent. Likewise, Sri Lanka will witness an inflation
of 13.3 per cent, highest in the region.
The report
said that uncertainties stemming from the Russian invasion of Ukraine, the
continuing coronavirus (COVID-19) pandemic, and tightening by the United States
Federal Reserve pose risks to the positive outlook in the region.
According to
the report, the Russian invasion of Ukraine poses the most severe risk to
developing Asia’s economic outlook. The war is already affecting economies in
the region through sharp increases in prices for commodities such as oil, and
has heightened instability in global financial markets. COVID-19 continues to
impact many parts of developing Asia, with some economies experiencing new
surges in cases.
Published in The Rising Nepal daily on 7 April 2022.
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