Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government’s ambitious target of achieving a 6% economic growth rate for the current fiscal year faces significant hurdles, according to initial estimates from the National Statistics Office. The office, in its report for the first quarter of the fiscal year, has projected a modest growth rate of 3.4%, far below the target.
Despite this, the current figure marks a slight improvement of 0.2% compared to the same period last year when the growth rate stood at 3.2%.
The estimated 3.4% growth rate has been attributed to positive developments in key sectors such as agriculture, electricity generation and distribution, tourism, and the hospitality industry. The office highlighted that the tourism sector witnessed increased activity, while electricity production and distribution also saw robust growth.
Furthermore, sectors like transportation, healthcare, and public administration have contributed to keeping the economy on a positive trajectory.
However, challenges remain, with six out of the 18 major economic sectors still in negative territory. The construction sector, in particular, continues to struggle, registering a contraction of 0.3% in the first quarter. This is a slight improvement compared to an 8.7% contraction recorded at the end of the last fiscal year.
In contrast, the same period last year had forecast a 6.9% growth in construction, underscoring the sector’s ongoing difficulties.
Sector-Wise Growth Estimates The National Statistics Office provided the following growth estimates for the first quarter of the current fiscal year across various sectors:
– Agriculture: 3% – Mining: 0.4% – Manufacturing: 2.3% – Hydropower: 21.4% – Water and Sanitation: 1% – Wholesale and Retail: 0.5% – Transportation: 6.7% – Service Sector: 6.3% – Information Technology: 2.2% – Financial Sector: 5.7% – Real Estate: 3.1% – Professional Services: 5.1% – Administrative Services: 5.4% – Public Services: 5.4% – Education: 3% – Health: 0.4% – Other Sectors: 0.7%
The government had aimed for a sharp recovery in economic activities this fiscal year following global disruptions and domestic challenges in recent years. However, the preliminary data suggests a cautious outlook, with key sectors struggling to achieve expected momentum.
The report highlights the need for targeted interventions and policy adjustments to stimulate growth in lagging sectors, particularly construction, which plays a pivotal role in the country’s overall economic performance.
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