Asian Development Bank releases Nepal Macroeconomic Update August 2016 issue Projected that GDP growth will be at 4.8% in FY2017 considering various factors.
Prepared by Sharad Bhandari and Narendra Chand of Asian Development Bank Nepal Resident Mission, the outlook discusses Nepal’s economic performance and forecasted the Nepal’s economic progress.
The outlook for FY2017 is moderately optimistic and hinges on the scale of recovery of agricultural output given the normal monsoon, the scope and pace of post-earthquake reconstruction and rehabilitation, budget execution, and remittance inflows
Economist Sharad Bhandari Presented the micro-economic part and Chand presented the overall scenario of procurement in Nepal. In the press meet, Asian Development Bank’s Nepal Resident Mission country director Kenichi Yokoyama said that Nepal’s expenditure in current fiscal year will likely to grow better than the last year given the present trend.
ADB’s country director Kenichi said that ADB’s current disbursement is quite high and they are close to achieve the target of spending over 200 million dollar. He said that Lumbini International Airport and Melamchi Drinking Water Project have made satisfactory progress. The target of Tribhuwan International Airport will also be met given the progress the contractor make in the runaway and terminal construction.
“The lingering impact of the catastrophic earthquakes in FY2015, slow post-earthquake reconstruction, and crippling trade and supply disruption resulted in gross domestic product (GDP) growth of just 0.8% in FY2016. The earthquake-led disruption of economic activities, especially in agricultural and industrial production, struggled to recover as reconstruction and rehabilitation efforts could not pick up speed,” said the Outlook.
According to report, this was exacerbated by the trade and supply disruption between September 2015 and February 2016. The combined effect was quite disruptive for the economy as GDP growth dipped to its lowest level since FY2002. Agricultural output grew by an estimated 1.3%, marginally higher than 0.8% in FY2015. Meanwhile, industrial output registered a negative growth of 6.3% in FY2016, sharply down from 1.5% growth in FY2015. The services sector, which accounts for about 53% of GDP and is the key driver of GDP growth, grew by 2.7%, lower than 3.6% after the earthquake in FY2015 and 6.2% in FY2014.