GDP projected to be lowest in 13 years
May 3, 2016: The Gross Domestic Product (GDP) of the current fiscal year is going to be below one per cent.
According to the Central Bureau of Statistics (CBS), the GDP in the current fiscal year will be 0.77 per cent. This growth rate is the lowest in 13 years. It is stated that the GDP growth rate would be nominal as the post-earthquake reconstruction has not taken up momentum and due to the negative impact on the economic activities for over six months owing to the obstruction at the border due to the movement in the Tarai-Madhes.
The CBS has made public new data after carrying out deep study of the national statistics at a time when various international financial institutions and banks have been releasing differing statistics related to the GDP.
The GDP, which stood at 5.72 per cent in the fiscal year 2070/071, was 2.32 per cent in fiscal year 2071/072. A situation has come in which the GDP that was normally in the range of four per cent has reached to the lowest point so far.
The rate of total price rise in agriculture and forest, fisheries, mines and mining, the primary sectors is projected to be 1.22 per cent. It was 0.71 per cent in the fiscal year 2071/072. The primary sector contributes 32.28 percent to the GDP.
The growth rate in the secondary sector as construction, industry and electricity, gas and water resources is likely decline by 6.3 per cent, the CBS stated. This sector has been badly hit due to the obstruction at the border, the decline in the flow of construction materials, raw materials and imported goods, and the earthquake. So, the increment rate of the total price growth will decrease, it is stated.
The service sector includes wholesale and retail business, hotel and restaurant, transportation, media, information and technology, financial adjudication, real estate and commercial service, public administration and defence, education, health and other community, social and individual services. This sector has contributed 54.29 per cent in the total GDP of the current fiscal year.
As per the preliminary estimate in the current fiscal year, the total inflation rate will remain at 2.37 per cent as compared to the fiscal year 2071-72 BS.
The annual growth rate of the agriculture sector as per the industrial classification will stand at 1.14 per cent, said Director, Ishwori Prasad Bhandari. A slump in the production rate of paddy, wheat and millet among other crops is assumed to have contributed in the decline in the annual growth rate while the prolonged drought has also taken a toll on production of staple crops.
The fisheries sector contributed 0.5 per cent in the total GDP in the ongoing fiscal year while the sector's annual growth rate stood at 11.67 per cent. The trend is attributed to the success in government's and non-governmental organizations' efforts in the sector and also due to the less amount of impact of the earthquake in Tarai plain where fish breeding is common site.
In the mine and excavation sector the growth rate is likely to remain at 6.54 per cent in the negative. The excavation and collection of stone, pebble, sand and soil in quake-stricken districts declined sharply while the excavation work was hampered further after the government issued a ban on constructing concrete buildings.
CBS's projection said that production of electricity, cooking gas and water will decline by 1.66 per cent this fiscal year (FY) as opposed to 2071-72 FY.
The disruption of over a dozen hydropower projects and receding water level in various reservoirs due to a long spell of drought among others are attributed to the situation.
Likewise, sectors like education, health, social and community is likely to witness a decline comparatively.
According to the projection, education sector is likely to witness a 6.99 percent decline as compared to FY 2071-72, health 8.85 percent and social 5.6 percent.
Per capita income to decrease
The CBS, however, said that per capita income will decline this fiscal year as well.
It said the per capita income will be at US dollars 752 as opposed to US dollars 762 in FY 2071-72. Increment in the value of US dollars is attributed to the situation, said CBS's director Bishnu Bhattarai. RSS
