Economy to grow by 6.8%, per capita income reaches $1,034
By Modnath Dhakal
Kathmandu, Apr. 27: The economy of the country is expected to grow at the rate of 6.81 per cent this fiscal year.
After the calculation of the economic activities of the first nine months of the current fiscal year 2018/19, it is estimated that the Gross Domestic Product (GDP) will go up by 6.81 per cent, said the Central Bureau of Statistics (CBS), a statistical agency under the National Planning Commission (NPC).
Nepal is embarking on high growth trajectory for the last three consecutive years with 6.3 per cent in the last fiscal 2017/18 and 7.74 in 2016/17.
According to the CBS, the size of national economy will reach Rs. 3.46 trillion by the end of this fiscal year from last year’s Rs. 3.03 trillion.
In 2015/16, the devastating earthquake and months-long Indian blockade at the southern border caused the economy sunk as low as 0.1 per cent. It has rebounded since then.
Contribution of primary sector – including agriculture and forestry, fisheries, mines and excavation – to the GDP will be 27.59 per cent with 5.10 per cent value addition.
It contributed about 28.67 per cent to the economy in the last fiscal 2017/19.
“Favourable weather has resulted in significant improvement in agricultural yield and the reconstruction has mobilised more forest products. Similarly, the mines sector has witnessed increment in product,” said the CBS.
Likewise, the secondary sector, which includes manufacturing and construction industries, electricity, gas and water, will contribute 14.60 per cent to the economy. This sector will witness about 8.10 per cent gross value addition against the last year’s contribution.
The industry sector had about 14.31 per cent contribution to the economy last year.
Similarly, the tertiary or the service sector will have 57.81 per cent share in the economy this year. It will have 7.29 per cent value addition.
Last year, it had 57.01 per cent contribution to the economy.
The tertiary sector includes wholesale and retail trade, hotels and restaurants, transport, storage and communications, financial intermediation, real estate, renting and business activities, public administration and defense, education, health and social work.
Karnali lags behind
According to the provincial calculations, State 3 has the largest contribution to the national economy while Karnali has the least.
State 3 has 35.44 per cent share in the national GDP while Karnali has just 4 per cent contribution. Likewise, Province 1 has 16.11 per cent share to the country’s economy, Province 5 has 14.26 per cent, Province 2 has 13.59 per cent, Gandaki 9.38 and Sudurpaschim 7.22 per cent.
Not only in its share to the national GDP, Karnali has the least growth rate with 5.68 per cent and smallest size of economy with Rs. 119.25 billion. Economy of Province 3 is about Rs. 1.43 trillion.
Per capita income up
The per capita income (PCI) has witnessed an increase of US $ 36 this year and reached $1034.
The figure is higher than the estimation of the NPC in its 14th Periodic Plan where the planning body has set the PCI target at $ 1012. To graduate Nepal to the developing country from its current Least Developed Country (LDC) status, it needs $1500 PCI. The country aims to graduate by 2022.
According to the CBS, the gross domestic savings has been continuously increasing from 2015/16 when the country could save only 4.07 per cent of its GDP but it will reach 20.48 per cent in the current fiscal.
The domestic saving was about 17.81 per cent of the GDP last year.
Increased domestic saving will boost more investment and help in capital formation.
The export has slumped to just 9.05 per cent of the GDP while import reached about 51 per cent of the GDP. It was 40.75 per cent five years ago.
Similarly, the workers remittance has again reached 26.24 per cent equivalent to the GDP from last year’s 24.91 per cent.