Economy to grow by 3.87 per cent, per capita income reaches $1456

The economy is going to grow by only 3.87 per cent at the consumer's price, in the current fiscal year.

According to National Statistics Office (NSO), the gross domestic production (GDP) is estimated to grow by 3.87 per cent despite the government's target of 6 per cent.

The economy will grow by 3.54 per cent at constant price in the current fiscal year, the report launched today reads.

Earlier, the government has projected the economy to grow by 4 per cent, whereas the World Bank (WB) has estimated it to grow by 3.3 per cent, the International Monetary Fund (IMF) by 3.1 per cent and Asian Development Bank (ADB) by 3.6 per cent due to slowdown in the economy.

Nepal’s economy will be the size of Rs 5.704 trillion by the end of the current fiscal year from Rs 5.348 in the last fiscal year, the report reads, adding that the per capita income is also expected to increase by $51 to $1456 in the current fiscal year from last fiscal year's $1405.

The increase in income is too low as Nepal is graduating to Developing Country (DC) status by 2026 from current Least Developed Country (LDC) status.

Due to the contraction in some sectors of the economy and the low capital expenditure has pulled the economic growth rate downwards, the report exposes.

Likewise, the report also shows that the share of service sector in the economy has reached 62.9 per cent. "The contribution of the secondary sector (industry-construction) is 12.5 per cent and the share of the primary sector (agriculture) is 24.6 per cent," it claims, adding that this fiscal year, the contribution of agriculture has increased slightly compared to last year, though the increase in agriculture sector alone cannot push the economic growth upwards.

Agriculture sector will grow by 3.05 per cent, while the non-agriculture sector will grow by 3.75 per cent, it adds.

The industrial sector has also contracted for the second year in a row due to the inability to increase production, according to the report. "This year, the industrial sector has contracted by 1.60 per cent, wheras last year there was a contraction of 1.98 per cent."

In 2021-22, the growth of the industry was 6.70 per cent, the report added estimating that there will be a contraction in the production of industries as there has been no significant improvement in the economy globally due to various adverse factors created in the economy in recent times.