The government had targeted to achieve six per cent economic growth in the budget for thee current fiscal year 2014-15. But the government – during the mid-term budgetary review – itself revised the economic growth target downwards to five per cent due to poor rain that is expected to bring the agriculture output down.
The CBS has projected the economic growth for the current fiscal year at 4.58 per cent due to expected low agriculture output on lower rain.
However, the April 25 devastating earthquake has slowed down the economic activities – including consumption and production both – pulling the economy further down to 3.04 per cent, said deputy director general of the CBS Suman Raj Aryal.
The sharp drop is also due to slowdown in almost all the 15 sectors on which the GDP is calculated.
“The growth of just three per cent is disappointing but it is not unexpected,” said National Planning Commission (NPC) member Dr Swarnim Wagle. "The decline of GDP by 1.5 percentage point in the economic activities of less than three months suggests a huge impact on economy," he said, adding that the biggest impact – after April 25 – will be seen in construction, real-estate, hotel and restaurants, agriculture, mining, manufacturing, financial sector, and education sectors. " Wholesale and retail, fishery, transportation and electricity sectors will also see a downward curve."
The banks and financial institutions have Rs 116 billion exposure in residential houses, Wagle said, adding that the banks and financial institutions will feel the heat in the next fiscal year too.
But health and social services sector is expected to grow despite the devastating earthquake due to increased activities in the hospitals and clinics, he said, adding, "The GDP is such a thing where we have to count even sick people as it amounts to growth of health sector. "The growth projection for public administration and defence has been kept unchanged as the government staffers are not expected to get reduced salaries and facilities."