Growth rate depends on political situation, agri

KATHMANDU, APR 19 -

The political situation and level of farm output will decide if Nepal will achieve the desired economic growth in 2013, said a United Nations report.

The Economic and Social Survey of Asia and the Pacific Report made public by the UN Economic and Social Commission for Asia and Pacific (ESCAP) said a realistic growth projection would be 4 percent instead of the government’s target of 5.5 percent this year.

Meanwhile, the Central Bureau of Statistics, a government agency responsible for estimating the growth, has already revised the rate downward to 3.6 percent.

The report unveiled on Thursday observed that a weak supply of food items kept inflation at a high 8.3 percent in the last fiscal year. It said that the cost of production of both agricultural and industrial products had been rising due to a severe electricity shortage and rising labour wages due to increasing labour exports.

The report said that the whole of South Asia including Nepal faced dual challenges — raising productivity to ensure that incomes are rising and poverty is falling and creating enough jobs for a growing working age population, which is expanding at the rate of 2 percent per annum.

“With almost 60 percent of the population under the age of 30, governments of the countries in South Asia have to take advantage of this demographic bulge,” stated the report.

Another challenge mentioned by the report is growing energy demand and supply constraints. It has pointed out that an energy deficit in the region is detrimental in terms of growth and poverty alleviation as the region faces regular and sustained power outages.

“The development of energy markets in South Asia through the creation of regional energy grids and cross-country pipelines could assist the region in promoting energy access and security,” it said.

Source: The Kathmandu Post