Nepal to grow by three per cent: IMF

KATHMANDU, APR 18:

The International Monetary Fund (IMF) has projected three per cent growth rate for Nepal in 2013 — the lowest in the last one decade.

International Monetary Fund is the third agency that has predicted a gloomy outlook for the Nepali economy in the current fiscal year.

Earlier‚ Central Bureau of Statistics (CBS) had slashed the gross domestic product (GDP) growth projection to 3.56 per cent. Likewise‚ Asian Development Bank (ADB) has also projected Nepal’s gross domestic product to grow by 3.5 per cent in current fiscal year 2012-13.

According to the current three-year plan that ends with this fiscal year‚ Nepal was supposed to witness GDP growth rate of 5.5 per cent.

These documents cite poor agriculture production and the delayed budget causing low capital expenditure as the main reasons for economic slowdown in Nepal this fiscal.

IMF has also projected that next fiscal year will also not be very bright for the Nepali economy that is expected to grow by four per cent. Even by 2018‚ IMF’s growth projection for Nepal stands at a mere 4.6 per cent. Nepal is one of the countries for which IMF’s growth projections stand at a minimum rate in its category of developing Asian countries.

Back in November‚ IMF had projected Nepal to go through GDP growth of 3.8 per cent as published in its annual Article IV consultation. However‚ since then‚ external factors and domestic considerations have dipped Nepal’s economic outlook.

A slower growth rate of Nepal’s major trade partner India has affected the Nepali economy. Moreover‚ delayed and uncertain budget along with under execution of spending plans have hampered the economy.

CBS had attributed the decline in agriculture growth rate at 1.21 per cent from last year’s 4.94 per cent as the factor pulling down overall economic growth rate. Moreover‚ manufacturing sector is expected to grow by a meagre 1.85 per cent in the current fiscal year.

With a favourable monsoon‚ adequate fertiliser supplies‚ timely adoption of a budget‚ and moderate expansion of

remittance‚ GDP growth will rebound to 4.2 per cent in

the next fiscal year‚ according to Asian Development Outlook of ADB.

Likewise‚ inflation projection by IMF for Nepal stands at nine per cent for the current fiscal year and 7.9 per cent for the next. Both CBS and the central bank have estimated Nepal to go through an inflation of 9.5 per cent in the current fiscal year.

Moreover‚ the report has forecast world output growth to reach 3.25 per cent in 2013 and four per cent in 2014.

Source: THT