Economy set to grow by 5.8%

Size of Nepali economy reaches Rs. 4105.5 billion

 

Kathmandu, Apr. 28

The Central Bureau of Statistics (CBS) has estimated that the economy will grow by 5.84 per cent at consumer price in the current fiscal year 2021/22. At basic price, the growth would be 5.49 per cent.

The statistical body under the National Planning Commission (NPC) has made the projections on the basis of the calculation of nine months real statistics and three months estimated economic activities.

It is the highest projection of the growth in the Gross Domestic Product (GDP) of the country amidst the liquidity crisis and external sector pressures when the multilateral donors like the World Bank and the Asian Development Bank have put the expansion estimates at 3.7 per cent and 3.9 per cent (at market price).

Although there are threats from the new wave of the COVID-19 pandemic and external sector shocks inflicted by Russia-Ukraine war, we have assumed that there wouldn't be much harm to economic activities in the remaining period of the fiscal year, said Nebin Lal Shrestha, Director General of the CBS.

Presenting the Annual Estimates of National Accounts of Fiscal Year 2021/22, Director of the CBS, Ishwori Prasad Bhandari said that the economic growth for the previous fiscal year 2020/21 was adjusted to 3.8 per cent from the earlier projection of 4.3 per cent.

Likewise, growth of economy during the first wave of COVID-19 in 2019/20 was set to -2.4 per cent. As per last year's projections, it was 1.99 per cent. Last year, the CBS had rebased the national accounts statistics from 2000/01 to 2010/11.

Size of economy Rs. 4105.5 billion

With this growth, the size of Nepali economy at current price has reached Rs. 4105.5 billion from Rs. 3662.4 billion in 2020/21. The size is measured Rs. 4851.8 billion in constant price.

Agriculture is witnessing a slow growth of 2.3 per cent this year while real estate and food services will expand by 11.4 per cent, construction by 9.5 per cent, trade and vehicle servicing by 9.1 per cent, and electricity and gas by 36.7 per cent.

But non-agriculture sector is growing by 6.9 per cent – industry by 10.29 per cent and service by 5.93 per cent.

Last year, agriculture, industry and service sectors witnessed the growth of 2.95 per cent, 4.36 per cent and 4.19 per cent respectively.

In a decade from 2010/11, contribution of primary sector to GDP is decreased to 25 per cent from 34 per cent while secondary (industry) sector has remained unchanged at 14 per cent, and tertiary (service) sector has climbed to 62 per cent from 52 per cent.

Elections support economic growth

Dr. Ram Prasad Phuyal, Member of the NPC, said that elections in this and next fiscal year will help to expand the size of the economy, it will provide some respite to the current contraction.

"We must focus on and strengthen the primary and secondary sector rather than imports to enlarge the economy," he said. According to him, the NPC has begun reviewing the 15^th periodic plan and growth projections will be adjusted considering the impacts of the pandemic on economic and business activities.

Likewise, Kewal Prasad Bhandari, Secretary of the NPC, said that Nepali economy has not contracted as the neighbouring and other economies shrunk. Large size of informal economy such as agriculture and businesses had prevented it from further contracting.

He maintained that the calculation of the CBS was different from the projection of the World Bank and ADB since the former used more robust data and analysis than these multilateral donors.

Bhandari also said that the confidence of people and entrepreneurs had gone up significantly. However, emergence of new variant of the COVID-19 continues to pose threats to the Nepali economy as well.

GDP per capita increases by 12.3 per cent

GDP per capita of Nepal at nominal price has reached Rs. 164,598 this year. It was Rs. 146,521 last year. It is a growth of 12.34 per cent against the growth of 8.94 per cent last year. This calculation is made by dividing the total production or income by the number of people in the country. This year, the updated demographic data generated by the Census 2021 is used.

Similarly, Gross National Income reached Rs. 165,649 from Rs. 147,318, and Gross National Domestic Income reached Rs. 201,923.

However, remittance inflow as the per cent of GDP reached 19.81 per cent. It has come down from 22.47 per cent last year. Nepal exported goods equal to 6.6 per cent of the GDP.

Likewise, final consumption of expenditure as percentage of GDP is 90.73 and domestic saving is 9.27 per cent.

Nepal had begun GDP compilation from 1961/62. It takes three years - preliminary, revised and final phase - to get the final statistics of economic indicators. 

Published in The Rising Nepal daily on 29 April 2022.