Agriculture growth 14 yr high
By Prem Khanal
Propelled by the a strong growth in both the agriculture and non-agriculture sectors, the long-ailing economy has bounced back to record 5.56 percent growth in the current fiscal year, highest economic expansion in last the seven years. With the growth, the total size of Nepali economy in producers’ price has scaled up to Rs 828.8 billion (US$12.80 billion) while the per capita income has also increased by around 11 percent to Rs 30,361 per year (470 US$). However, with the creeping inflation, which is around 9 percent, the real purchasing capacity of Nepali consumers is estimated to grow marginally in the year. According to a preliminary estimate of national accounts prepared by the Central Bureau of Statistics (CBS), agriculture sector, which contributes 32 percent to national economy, grew by 5.65 percent while the growth of non-agriculture sector was around 5.52 percent.
Finance minister Dr Ran Sharan Mahat said that the growth which has been encouraging, was made possible due to prudent and tactful management of the economy even at the most difficult period. The big push for this year’s growth came from the long-yeaning agriculture sector, which witnessed a record 5.65 percent growth in 14 years, thanks mainly to almost 17 percent growth in production of paddy, the heavyweight of the agricultural sector. Likewise, the wholesale and retail sector that holds the second largest contribution to national economy after agriculture expanded by 6.43 percent whereas its expansion last year was negative. Increasing purchasing power of consumers mainly due to a double-digit growth in remittance inflow fueled the growth.
Similarly, despite a strong growth in communication sector, the lengthy transport disturbances took a toll on the sector, resulting in a slowest growth of 6.6 percent in transport and communication sector, the third largest contributor to national output. The most impressive growth came from the financial intermediation sector, which mainly represents banking and insurance businesses. According to CBS estimate, annual growth of the sector recorded at 13.8 percent from last year’s around 9 percent.
Robust rebound in tourist arrivals also propped up the long-ailing hotels and restaurants sector to grow by 7.5 percent, the highest growth in years. Likewise, construction sector that represents nearly 7 percent in the overall economy also showed a moderate growth of 4 percent compared to 2.5 percent last year. However, the most pessimistic development came from the manufacturing sector, which recorded a nominal growth of 0.18 percent, lowest since it recorded negative in 2001/02 mainly due to deteriorating industrial relations and political uncertainty.