The World Bank projects continued strong growth with an average annual rate of 6.5 per cent – in the medium term – driven by investments in the tourism sector, particularly the Visit Nepal Year 2020 (VNY2020) programme, including efforts to increase air connectivity.
High tourist arrivals will be supported by the Visit Nepal Year 2020 programme, the completion of the second international airport, the construction of big hotels and the increase in air connectivity through implementation of the newly-revised air service agreements with countries like Australia, Cambodia, China, the UAE and Vietnam, the update noted.
The 6.5 per cent growth forecast by the multilateral development partner – in fiscal year 2019-20 – is sharply lower than the 8.5 per cent economic growth target of the government for the current fiscal year.
Launching Nepal Development Update today, the World Bank claimed that industrial growth is likely to be supported by construction activities, investments in the cement and hydropower sectors, and improved capacity utilisation in the manufacturing sector.
The report also notes that import growth will slow down as the government implements its programme to keep the fiscal deficit in check. “It should help contain the trade deficit,” the report reads adding that inflation is expected to pick up slightly but will remain below 5 per cent assuming stable agricultural production, regular supply of electricity, and low inflation in India. “The focus going forward will need to be on strengthening exports.”
“Increased exports will be critical to sustained growth over the medium-term,” said World Bank senior economist Dr Kene Ezemenari, who led the team that produced the update. “It will be important for government to continue with reforms to attract foreign investment,” she said, adding that future reforms will need to be grounded in strong analysis and data to effectively support Nepal’s growth aspirations.
On the supply side, according to the report, the growth will continue to be driven by private investment and government consumption. “Government consumption will be supported by increased spending on salaries and on goods and services,” the report reads, adding that efforts, in addition, aimed at building capacity at the sub-national levels coupled with the implementation of performance-based contracts is also likely to raise government spending.
The Nepal Development Update – a bi-annual report of the World Bank – highlights the importance of data for development, particularly in the context of the country’s historic transition to federalism. Federalism has created a surge in demand for more and better data. Enhanced data availability is needed to strengthen planning and budgeting at the sub national levels, including the preparation of Medium-Term Expenditure Frameworks (MTEF).
In addition, the transfer of fiscal resources to sub national levels also requires data on several parameters. A robust federal framework therefore rests on more and better data that will support evidence-based policies.
“The need for Nepal is data that is disaggregated, more frequent, reliable and accessible,” finance minister Dr Yuba Raj Khatiwada said. “Nepal’s federal structure has added another dimension for data at the provincial level, which is a challenge but very important for development programmes to leave no one behind,” he said, adding that the Statistics Act, which is to be approved soon, is expected to further empower the Central Bureau of Statistics (CBS) and provide added responsibility to sub national governments on data for national policy making.
In its Special Focus section, the report articulates a vision for a future data ecosystem and the need for short-term reforms to make the most of existing data and long-term reforms that establish an enabling environment that fosters data sharing, integration and use. Measures that can be implemented in the short-term include the publication of data in machine readable format, and the development of a comprehensive data dissemination policy and open government strategy.
“Data is central to the success of federalism,” World Bank Country Manager for Nepal Faris Hadad-Zervos said. “Nepal needs a vision and strategy for a future data ecosystem that is aligned to the new federal structure and promotes engagement of civil society and the private sector,” he said, adding that engaging all data actors – including civil society, the private sector and government agencies at various levels – can play a greater role in data production, sharing and use. “This will help in the design of reforms for better service delivery to citizens and an improved business and investment climate.”
In Nepal, the World Bank Group (WBG) includes the International Development Association (IDA), the concessionary lending arm; the International Finance Corporation (IFC), the private sector arm; and the Multilateral Investment Guarantee Agency (MIGA), the investment risk insurance arm.
The World Bank currently supports 25 active investment projects in Nepal with $2.4 billion dollars in commitments from IDA. The indicative resources available under IDA18 (fiscal year 2018-20) were about $1.39 billion, including $300 million from the IDA Risk Mitigation Regime. IFC aims to commit about $800 million to $1.2 billion over the five-year period (fiscal year 2019 to fiscal year 2023). MIGA is actively seeking opportunities to support foreign private investment into Nepal. IFC and MIGA may make use of the IDA IFC/MIGA Private Sector Window (PSW) and the MIGA Guarantee Facility to underwrite eligible projects.
The World Bank Group (WBG) fielded its first economic mission to Nepal in 1963 to assess the country’s development prospects and challenges. It approved its first credit in 1969 for a telecommunications project. Since then, the World Bank has provided Nepal $4.75 billion in assistance, some $3.48 billion in credits and $1.27 billion in grants.
High tourist arrivals will be supported by the Visit Nepal Year 2020 programme, the completion of the second international airport, the construction of big hotels and the increase in air connectivity through implementation of the newly-revised air service agreements with countries like Australia, Cambodia, China, the UAE and Vietnam, the update noted.
The 6.5 per cent growth forecast by the multilateral development partner – in fiscal year 2019-20 – is sharply lower than the 8.5 per cent economic growth target of the government for the current fiscal year.
Launching Nepal Development Update today, the World Bank claimed that industrial growth is likely to be supported by construction activities, investments in the cement and hydropower sectors, and improved capacity utilisation in the manufacturing sector.
The report also notes that import growth will slow down as the government implements its programme to keep the fiscal deficit in check. “It should help contain the trade deficit,” the report reads adding that inflation is expected to pick up slightly but will remain below 5 per cent assuming stable agricultural production, regular supply of electricity, and low inflation in India. “The focus going forward will need to be on strengthening exports.”
“Increased exports will be critical to sustained growth over the medium-term,” said World Bank senior economist Dr Kene Ezemenari, who led the team that produced the update. “It will be important for government to continue with reforms to attract foreign investment,” she said, adding that future reforms will need to be grounded in strong analysis and data to effectively support Nepal’s growth aspirations.
On the supply side, according to the report, the growth will continue to be driven by private investment and government consumption. “Government consumption will be supported by increased spending on salaries and on goods and services,” the report reads, adding that efforts, in addition, aimed at building capacity at the sub-national levels coupled with the implementation of performance-based contracts is also likely to raise government spending.
The Nepal Development Update – a bi-annual report of the World Bank – highlights the importance of data for development, particularly in the context of the country’s historic transition to federalism. Federalism has created a surge in demand for more and better data. Enhanced data availability is needed to strengthen planning and budgeting at the sub national levels, including the preparation of Medium-Term Expenditure Frameworks (MTEF).
In addition, the transfer of fiscal resources to sub national levels also requires data on several parameters. A robust federal framework therefore rests on more and better data that will support evidence-based policies.
“The need for Nepal is data that is disaggregated, more frequent, reliable and accessible,” finance minister Dr Yuba Raj Khatiwada said. “Nepal’s federal structure has added another dimension for data at the provincial level, which is a challenge but very important for development programmes to leave no one behind,” he said, adding that the Statistics Act, which is to be approved soon, is expected to further empower the Central Bureau of Statistics (CBS) and provide added responsibility to sub national governments on data for national policy making.
In its Special Focus section, the report articulates a vision for a future data ecosystem and the need for short-term reforms to make the most of existing data and long-term reforms that establish an enabling environment that fosters data sharing, integration and use. Measures that can be implemented in the short-term include the publication of data in machine readable format, and the development of a comprehensive data dissemination policy and open government strategy.
“Data is central to the success of federalism,” World Bank Country Manager for Nepal Faris Hadad-Zervos said. “Nepal needs a vision and strategy for a future data ecosystem that is aligned to the new federal structure and promotes engagement of civil society and the private sector,” he said, adding that engaging all data actors – including civil society, the private sector and government agencies at various levels – can play a greater role in data production, sharing and use. “This will help in the design of reforms for better service delivery to citizens and an improved business and investment climate.”
In Nepal, the World Bank Group (WBG) includes the International Development Association (IDA), the concessionary lending arm; the International Finance Corporation (IFC), the private sector arm; and the Multilateral Investment Guarantee Agency (MIGA), the investment risk insurance arm.
The World Bank currently supports 25 active investment projects in Nepal with $2.4 billion dollars in commitments from IDA. The indicative resources available under IDA18 (fiscal year 2018-20) were about $1.39 billion, including $300 million from the IDA Risk Mitigation Regime. IFC aims to commit about $800 million to $1.2 billion over the five-year period (fiscal year 2019 to fiscal year 2023). MIGA is actively seeking opportunities to support foreign private investment into Nepal. IFC and MIGA may make use of the IDA IFC/MIGA Private Sector Window (PSW) and the MIGA Guarantee Facility to underwrite eligible projects.
The World Bank Group (WBG) fielded its first economic mission to Nepal in 1963 to assess the country’s development prospects and challenges. It approved its first credit in 1969 for a telecommunications project. Since then, the World Bank has provided Nepal $4.75 billion in assistance, some $3.48 billion in credits and $1.27 billion in grants.
