ADB forecasts 3.5 per cent growth

According to a recent analysis by Asian Development Bank (ADB), Nepal's performance is relatively good and it might see a 'tentative' 3.5 per cent growth this year, said Barry J Hitchcock, country director of the Nepal Resident Mission of ADB here today. However the government has targetted seven per cent growth.
"However, Nepal's growth depends on the agriculture sector," he said adding that ADB has decided to increase its assistance to Nepal to around $200 million from the earlier $100 million, half as soft loan and half as grant.
Analysing the present global meltdown and its impact on Nepal he said the global economic recession had not yet widely affected Nepal but that eventually it would. "There will be a drop in demand in the tourism sector but till India -- the major trading partner of Nepal -- is doing well, there will not be a major impact," Hitchcock said adding that if needed, ADB was prepared to help Nepal fight recession.
The new country director, while giving a brief performance evaluation of ADB-financed projects during the year 2008, said the bank had approved grant assistance of $8 million for the education sector and $25 million for information and communication development.
Similarly, $106.3 million was approved for the development of local governance and community development, according to the bank. By end of December 2008, the ADB portfolio comprised 18 loans worth $586 million net, 10 investment grants worth $332 million and 33 ongoing technical assistance projects totalling $29 million.
Though the year 2008 was not without challenges it was a good year for ADB in terms of assistance, Hitchcock said. "No projects were considered at risk till the end of 2008, a remarkable achievement compared to 14 per cent in 2007 and 17 per cent in 2006." he added.
The ADB resident representative opined that electricity supply would be a major challenge for the coming year. "Power outage is a major factor," Hitchcock said adding that ADB would be happy to fund hydropower projects.
"However, it's time Nepal started thinking of storage type of hydro projects -- instead of present run-of-the river projects that mostly depend on rainfall -- to solve the problem of power outage," he added.
On the occasion, Hitchcock also launched a new publication --- Voices from the Field: On the Road to Inclusion. It contains the responses of people at the receiving end.