Asian Development Bank (ADB) has revised the growth at 5.6 per cent against its earlier projection of 3.8 per cent for Nepal in 2008.
"Similarly, for the year 2009, Nepal will post five per cent growth," states the updated Asian Development Outlook (ADO) 2008 that has been published by the bank. The 2009 projection — to five per cent — is also an amendment.
According to an update publication of the Asian Development Outlook (ADO) 2008, Nepal will achieve a growth 5.6 per cent in 2008, against earlier projection of 3.8 per cent. The update matches the recent yearly report of the central bank.
"Central Bureau of Statistics (CBS) has placed the real GDP growth in basic prices at 5.6 percent in the fiscal year 2007-08," Nepal Rastra Bank's yearly report had revealed.
The updated ADO is also hopeful of the political situation. But it terms the situation fragile "despite successful constituent assembly elections as well as elections for president and prime minister," the updated Nepal report states.
Industrial growth, however, declined to 1.8 per cent from 3.9 per cent due to the impact of power and fuel shortages and labour problems.
"Assuming normal weather conditions, greater political stability and improved power and fuel supplies, GDP will grow by about five per cent in 2009," the report states.
As a result of sharp increases in food and oil prices, year-on-year inflation rose to 13.4 per cent in mid-July 2008. "But average inflation in 2009 is expected to hit 8.5 per cent, an increase form earlier forecast of 6.5 per cent," it states.
Higher remittances and tourism receipts helped more than offset a widening trade deficit to bring the current account surplus to 1.9 per cent of GDP (compared to a deficit of 0.1 per cent in the previous year). The update projects the current account surplus at 1.5 per cent of GDP, supported by sustained growth in remittances and tourism receipts for 2009.