Economic growth stalls below four per cent

Poor industrial performance has pulled the economic growth below four per cent against the government projection of 4.5 per cent.
According to the preliminary report of the Central Statistics Bureau (CBS), the growth is projected to be around 3.9 per cent. "The low manufacturing growth, slowdown in the construction sector due to tight liquidity situation and higher interest rates; and regular power outage stalled the industrial growth pulling the obverall growth," said former member of National Planning Commission (NPC) Dr Puskar Bajracharya.
The industrial growth stands around 1.7 per cent, according to the preliminary forecast -- due to plunge in the key manufacturing items. The Manufacturing Price Index has recorded a growth of a mere 1.23 per cent in the second quarter compared to the first quarter of this fiscal year.
However, the agriculture growth recorded a good four per cent and service sector growth that stood around 5.2, according to the preliminary report, boosted the overall growth to nearly four per cent, though, it is not encouraging, he added.
According to the preliminary estimates of the Ministry of Agriculture and Cooperatives, the summer crop production has increased by 11 per cent and 11.5 per cent for paddy and maize, respectively compared to last year, while millet production has increased by one per cent giving relief to the agriculture growth.
The agriculture, that used to have around 40 per cent contribution in the gross domestic production (GDP), however, at present contributes to almost a quarter to the GDP that was projected to grow by 5.5 per cent in the Three Year Interim Plan.
"However, the delayed budget that slowed down the government spending, trade and consumption, coupled with the private sector economic activities hit the economy hard," he said, adding that there is also not any encouraging signal from the political quarters creating policy dilemma.
The economy grew by 3.53 per cent in the last fiscal year and by 3.95 per cent a fiscal year ago in 2008-09. In the last one decade, only in the fiscal year 2007-08, the country had witnessed a growth of 5.80 per cent.