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Progress stalled: Economic Survey
KATHMANDU, JUL 11 -
Once again, a flop show. Nepal’s economic growth will be limited to 3.5 percent in the fiscal year 2009-10. Progress is stalled for the second consecutive year because the economy is hostage to uncertainty at every level.
The Economic Survey released on Sunday shows that the agriculture sector’s growth would be at 1.1 percent while the non-agriculture sector may grow by 5.1 percent, both far below the target set by the current budget. The budget has targeted an economic growth of 5.5 percent and growth in the agriculture sector and the non-agriculture sector at 3.3 percent and 6.6 percent respectively.
The dismal performance of the agricultural sector that contributes 33 percent to the gross domestic product (GDP) and on which the livelihood of two-thirds of the population depends on indicates a state of poverty that is likely to worsen next year. Meanwhile, inflation rose to 10.7 percent against a target of 7 percent, hitting the poorer sections.
With the budget a prey to political tussle, low economic growth wasn’t unexpected. The survey presented in the legislative parliament by Finance Minister Surendra Pandey on Sunday shows a decline in agriculture production due to adverse weather situations and limited expansion of economic activities under non-agriculture sector. Economists and former finance ministers say low economic growth was bound to happen. “This 3.5 percent economic growth is low,” said former finance minister Ram Sharan Mahat. “The economy is a victim of political uncertainties and weak governance.”
The survey shows how country’s income sources are shrinking due to dismal performance of the external sector. As per the survey, the growth rate of remittance inflow has remained at 7 percent, income from tourism has declined to -0.3 percent and export is negative at 9.7 percent. With imports rising by 43.9 percent, the country suffered a balance of payment deficit of Rs 17 billion in 10 months due to the tottering external sector which is now slowly recovering. Impressive growth of over 35 percent in capital expenditure, expansion of road networks and electronic bidding that saved almost Rs 15 billion are some of the bright spots.
Third party insurance programme introduced in the current budget has been successful in bringing down incidents of road blockades due to accidents.
“The picture that the survey has projected is not so bad if we consider the constraints that the economy faced this fiscal,” said Keshav Acharya, senior economic advisor at the Ministry of Finance.
Posted on: 2010-07-12 09:01
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