According to the National Statistics Office (NSO), the country’s economic growth rate is projected to be almost four times lower than the government’s aim for the current fiscal year.
The government has set a goal of 8 percent economic growth for the current fiscal year (FY 2022–23), however the NSO predicts that it will only be 2.16 percent. The primary contributors to Nepal, the World Bank and Asian Development Bank, have estimated the growth rate to be 4.1 percent on average.
According to the NSO, Nepal’s GDP is projected to have grown to 5.38 trillion rupees in the current fiscal year 2022–2023. The current fiscal year will still expire in two more months. The office predicts that Nepal’s economy would increase by 1.16 percent in consumer prices and 2.16 percent in base prices in FY 2022/23.
According to the figures compiled by NSO based on the third quarter’s actual calculations and the fourth quarter’s predicted economic activity, the economy grew by 2.16 percent in the third quarter. The total economic growth rate “has been affected due to the significant decline in the construction and mining sectors,” according to NSO.
According to the department’s first projection, the primary sector will contribute 24.6% of the current year’s GDP. Agriculture, forestry, fisheries, mining, and quarrying are all included in this industry. The gross value added (GVA) growth rate of this sector in the current fiscal year (FY 2022/23) is predicted to rise by 2.69% at constant prices compared to the previous fiscal year (FY 2021/22). Despite a rise in the production of dry crops this year, such as rice, the department said that the output of winter crops, as well as milk, eggs, and meat, did not significantly increase.
Similar to this, it is anticipated that the secondary sector would contribute 12.9% of the GDP for the current fiscal year. Industry, supply services for electricity, gas, steam, and air conditioning, water supply, sewage waste management and recycling operations, and the building industry are all included in this sector. The current fiscal year’s GVA growth rate for this sector is projected to improve by 0.56 at constant prices as compared to the prior fiscal year. The NSO said that the reduction in the industrial and construction sectors was a major factor in the gross value added (GVA) growth rate being lower than it was the previous year.
Similar estimates put the contribution of the service sector to the GDP for the current fiscal year at 62.4%. Wholesale and retail trade, lodging and food services, transportation and storage, information and communication, financial and insurance, real estate, professional and administrative services, public administration and defense, education, health, and other services are all included in this industry.
The sector’s expected gross value added (GVA) growth rate for the current fiscal year, calculated at constant prices, is 2.33 percent. There is a negative growth rate in wholesale and retail trade as well as a slow growth in transport and storage services as a result of the fall in imports and local industrial goods. As a result, this sector’s GVA has fallen from previous year, according to NSO.
Various industrial sectors’ effects on GDP
The non-agricultural sector is expected to contribute 75.88 percent of the GDP for the current fiscal year, while the agricultural sector is expected to contribute just 24.12 percent. The GVA of the agricultural sector (agriculture, forestry, and fishing) is predicted to rise by 2.73% in the current fiscal year, compared to a rise of just 1.92% for the non-agricultural sector.
The building industry has seen a complete halt in activity this year. This sector’s economic growth rate is predicted to be 2.62 percent less than the national average. The agency reports that domestic output and the import of building materials have both decreased during the current fiscal year, along with a decline in public and private construction activities. Because of this, the office’s first projection is that the rate of economic growth will be negative. Additionally, it is predicted that this industry would contribute 5.52 percent of the nation’s GDP.
The manufacturing sector is expected to contribute 5.32 percent of the GDP for the current fiscal year, according to NSO’s projections. The office said that “it is estimated that the gross value added (GVA) growth rate in the fiscal year will be negative by 2.04% compared to the last fiscal year due to the decline in production of vegetable, mustard, soybean, and sunflower oils as well as iron and steel production.”
Similarly, it is anticipated that the real estate industry would grow by 2.17 percent in the current fiscal year. Land acquisition and sale, leasing, providing services for other real estate transactions, and housing services accessible from one’s own house are the key real estate transaction services. Additionally, it is anticipated that this industry would contribute 8.37 percent of the nation’s GDP this year.
The GDP for the current fiscal year will include 1.98 percent from the lodging and food services industry. The NSO study states that this sector’s overall value addition has increased during the previous fiscal year and is projected to rise by 18.56 percent.
The research also notes that the improvement in domestic tourism and the notable rise in overseas visitor arrivals have had a favorable impact on the tourism sector’s rate of value added growth.
Nepalis’ per capita income is expected to be the same over the next 12 months.
The per capita income of Nepalis will be $1,399 this year, or Rs. 182,683. The sum was the same as it was the previous year. Prior to that year, it was $1,277 USD.
In a same vein, the NSO forecasts that the whole national income per person will amount to Rs 184,140, or USD 1,410. Remittances are expected to total Rs 1.23 trillion this year, according to the NSO. Additionally, it is predicted that remittances would contribute 22.89 percent of the country’s GDP.
In the meanwhile, the Nepal Rastra Bank reports that in the last eight months, remittances of Rs 794.32 billion have been received. It is anticipated that this year’s imports of goods and services would total Rs 1.96 trillion. 36.5 percent of the GDP is represented by this.
In the first nine months of the current fiscal year, products and services worth more than Rs 1.2 trillion have been imported, per statistics from the Department of Customs.