Nepal's per capita income grows by over $100 for second year in a row

Kathmandu, Apr. 25: The average income of Nepali citizen has witnessed a 'significant' growth for the second year in a row.

The Per Capita Income (PCI) of Nepalis has touched four digits for the first time and reached US $1,004 – NRs. 106,333 annually.

The PCI that hovered around US $700 - $750 from 2011 to 2016 had reached $862 in the last fiscal 2016/17, the year which witnessed the highest economic growth in more than two decades.

According to the Central Bureau of Statistics (CBS), a statistical body under the National Planning Commission, continuous growth in manufacturing and construction activities after the earthquake had pushed the income up.

CBS Director General Suman Raj Aryal said that the growth in PCI indicates that economic activities had been increased over the years.  

Construction and manufacturing sector are expected to grow by 7.60 per cent and 8.04 per cent respectively.

If the country continued to achieve the same growth, it would meet the income target required to graduate Nepal from the current status of Least Developed Country (LDC) to a developing one by 2022.

Recently, the government had sent a note to the United Nations that it didn't want to graduate from the LDC this year, as per its earlier plan.

Nepal was apprehensive of not meeting the target of Gross National Income (GNI) PCI $1242 in 2018 though the country is eligible to graduate on two other criteria – Human Asset Index and Economic Vulnerability Index.

The CBS has also projected that the economic growth of the current fiscal year will be 5.89 per cent, more than 1.5 percentage point down from the previous year.

According to the revised forecast, the growth rate for the previous fiscal year 2016/17 is 7.39 per cent which was earlier estimated at 6.94 per cent.

However, the projection is higher than the estimates of the Asian Development Bank and World Bank, 4.7 per cent and 4.6 per cent respectively.

India, China, Bangladesh, Bhutan and Pakistan are expected to see the growth of 6.5 per cent, 6.9 per cent, 7.3 per cent, 7.69 per cent and 5.6 per cent respectively.

The CBS projection has shown that the share of primary sector, which includes agriculture, forestry, fishery and mines, is continuously going down.

"Primary sector will have 28.21 per cent share in the economy this year as compared to last year's 29.35," said Ishwari Prasad Bhandari, Director of the CBS.

Composition of GDP (in %)

Sector	2015/16	2016/17	2017/18
Primary Sector	32.17	29.35	28.21
Secondary Sector	13.64	14.09	14.18
Tertiary Sector	54.19	56.56	57.61

Source: CBS

The share of secondary sector, including construction, manufacturing, energy and water, has almost remained constant at 14.18 per cent while the share of tertiary sector – trade, communication, 

transportation, and other service industries – has gone up by more than 1 per cent point to 57.61 per cent.

The primary, secondary and tertiary sectors are expected to grow this year by 2.92 per cent, 8.77 per cent and 6.62 per cent.  

The remittance inflow is projected to go down to 24.25 per cent as compared to the Gross Domestic Product (GDP) from 26.8 per cent in the last fiscal.

Similarly, the final consumption is 84.97 per cent and gross fixed capital formation is 34.11 per cent of the GDP.

Published in The Rising Nepal on 26 April 2018.