The country
is going to witness much lower growth rate than the government has targeted.
According to
the World Bank report Global Economic Prospectus 2014, Nepal is going to see
3.8 per cent growth in the year 2014, a little improvement than a year ago's
3.6 per cent, but much lesser than the government's target.
Slower
government expenditure – especially capital expenditure – despite timely
monsoon that might boost agriculture growth, is going to hit the economic
growth as the government has spent only around 13 per cent to rs 11 billion of
the capital expenditure – out of Rs 85.10 billion capital expenditure allocated
to achieve 5.5 per cent GDP growth.
The country
is planning to graduate from the current Least Developed Country (LDC) to
developing country status and it needs around six per cent growth rate to
graduate to the next level. However, the slow government expenditure and low
private sector borrowing is neither going to help create employment nor
boosting the growth.
The World
Bank has projected 4.4 per cent growth rate for 2015 and 5.2 for 2016.
According to
senior economist Prof Dr Madan Kumar Dahal, over the last five years Nepal's
average economic growth is terribly low confined to 3.5 per cent, lowest in the
South Asia region. "The whole gamut of development is entirely attributed
to foreign aid comprising loans and grants, for internal resource mobilisation
is extremely inadequate to supplement capital expenditure and, unfortunately,
expenditure efficiency is very low," he said, adding that Nepal's economic
development is a challenging proposition and it is akin to traveling on the
silk road. "The economy is passing through a critical phase of low level
equilibrium trap circumscribed by poverty and stagnation in conjunction with
structural constraints such as high cost economy, subsistence agriculture and
alarmingly growing dependency."
In addition,
conspicuous inefficiency, mounting corruption and inordinately poor governance
are the prime master-bottlenecks to economic development, he added.
Though the
incumbent has promised to handover a stable economy to the elected government,
the new government is going to face a challenge to expedite capital expenditure
and must strike on to resolving the issues and crises facing the economy by
devising pragmatic strategies covering short run, medium and long-term
perspectives.
No comments:
Post a Comment