Economic Survey projects growth at 5.84%

Kathmandu, May 28:

The government has projected economic growth rate of 5.84 per cent for the current fiscal year 2021/22.

According to the Economic Survey 2021/22 presented by Finance Minister Janardan Sharma in the House of Representatives on Saturday, the economic growth rate is expected to be higher than the previous year. However, this is lower than the growth projection of 7 per cent made by the government.

Due to the unseasonal rains and spread of Omicron virus, the economic growth rate could not be achieved as per the target in the current fiscal year.

The economic growth was 4.25 per cent in the last fiscal year 2020/21.

The size of Nepal's economy is Rs. 4,851.6 billion. Bagmati is projected to have a maximum share in the economy with of 36.9 per cent contribution while Karnali will make the smallest support of 4.1 per cent.

However, economic indicators, except external sector are satisfactory, said the survey.

While the contribution of agriculture sector to the total Gross Domestic Product (GDP) has been declining, the contribution of service sector is increasing. In the current fiscal year, agriculture sector is projected to grow by 2.3 per cent, industry by 8.1 per cent and services sector by 6.6 per cent.

The contribution of agriculture, industry and service sector has been 23.9 per cent, 14.3 per cent and 61.8 per cent respectively. The contribution of agriculture, industry and service sector to GDP was 37.4 per cent, 17.5 per cent and 45.1 per cent respectively two decades ago.

This shows that with the change in the structure of the country, Nepal's economy has been gradually transformed from agriculture to a service-oriented one.

In the current fiscal year, the GDP growth rate of Province 1 is 5.41 per cent, Madhes Province 4.82 per cent, Bagmati 6.74 per cent, Gandaki 6.17 per cent, Lumbini 5.36 per cent, Karnali 5.47 per cent and Sudurpaschim 4.92 per cent.

The share of consumption to the GDP was 92.3 per cent in the last fiscal year 2020/21 and it is estimated to be 90.7 per cent in the current fiscal year.

Total investment has increased in the last two fiscal years as such investment has shrunk by 25.9 per cent in fiscal year 2019/20. The total investment, which increased by 29.3 per cent in fiscal year 2020/21, is estimated to increase by 18.1 per cent to Rs. 1,807.29 billion in the current fiscal year.

In FY 2020/21, the gross domestic product (GDP) ratio was 35.8 per cent, but in 2021/22, it is expected to increase to 37.3 per cent.

 PCI increases to $1,381

The per capita income of Nepalis has reached US$ 1,381 in the current fiscal year. According to the survey, the income of Nepalis has increased by 10.8 per cent in one year.

The per capita income, which was USD 1,246 in the previous fiscal year, is estimated to reach US$ 1,381 this year. Similarly, per capita national expenditure is estimated at US$ 1,683.

FDI inflows up

Foreign direct investment in the country has increased by 60 per cent during the first eight months of the current fiscal year to Rs. 16.30 billion. The FDI inflow was Rs. 10.18 billion during the first eight months of last fiscal year.

Approximately, Rs. 228 billion investment has been approved during the first eight months of the current fiscal year.

The number of registered companies till mid-February, 2022 is 283,358.

Province-wise, Bagmati has the highest number, 70.7 per cent, registered companies against Karnali's 1.2 per cent.

Country adds 520 MW energy

Nepal's total installed hydroelectricity capacity has increased by 520 megawatts – from 1685 MW by mid-July in 2021 to 2205 MW in mid-March 2022. This is an increment of 30.9 per cent over the period of eight months, primarily backed by 456-MW Upper Tamakoshi Hydroelectricity Project.

According to the Economic Survey 2021/22 presented at the Federal Parliament by Minister for Finance, Janardan Sharma 'Prabhakar', while about 94 per cent population has access to electricity, including the alternative energy, per capita electricity consumption has reached 270-kilowatt hour.

The government has published the Economic Survey 2021/22 with annual achievements and results in various economic sectors based on the data of the eight months (up to mid-March 2022).

Only 155 KM road added

In the eight months of the current fiscal year, the country has added 155 KM of road while 265 KM road is gravelled and 325 KM is black-topped. Last year, the country had added 472 KM of new road. By mid-March, the country had about 16,939 KM blacktopped, 8,111 KM gravelled and 8,821 KM earthen road.

Total length of national highways and roads has reached 33,821 KM. Likewise, length of all types of roads including at the province and local level has increased to 64,617 KM.

Similarly, by mid-March, broadband internet service has reached to 738 offices of the local units, 6190 ward offices, 5196 secondary schools and 4147 health centres. Telephone density has reached 139.86 per cent and density of internet customers climbed to 116.9 per cent from 82.8 per cent a year ago.

Access to water supply widens

Meanwhile, 93.4 per cent people have access to the basic water supply while only 24.8 per cent population has access to high or medium level quality water supply. In the eight months, additional 42,857 people have been connected to the basic water supply facility.

More than 2.8 million beneficiaries are enrolled in various social security scheme's online system. The government has distributed Rs. 46.42 billion in social security allowances to senior citizens, single women, people with disability, minorities and children.

The country has produced 1.73 million tons of milk, 381,000 tons of meat and 1.83 billion eggs.

However, the number of tourist arrival has dropped this year by 34.3 per cent. In 2020, Nepal had welcomed 230,085 tourists while in 2021 only 150,963 foreigners came to the country.

  Published in The Rising Nepal daily on 29 May 2022. Written jointly with Laxman Kafle.