Kathmandu, April 2:

The Asian Development Bank (ADB) has projected 3.8 Gross Domestic Production (GDP) growth in 2008 and 4.3 per cent in 2009. However, the government had last month projected a revised 4.5 per cent growth from five per cent.

In its annual report — Asian Development Outlook (ADO) — published here in the valley today, ADB stated that the growth rate would be marred by the rising inflation, which it estimates to remain at seven per cent.

“The inflation would remain at seven per cent in 2008 and 6.5 per cent in 2009,” said Paul J Heytens, country director, Nepal Resident Mission, releasing the report.

But the report on the other hand also states the immediate challenges like rising petroleum prices that needs timely adjustment.

However, the price adjustment of petroleum products would again fuel the inflation making not only the goods and commodities more dearer but also beyond the reach of the common people. The power shortage is yet another challenge — that is not going to be solved immediately — stated in the report.

The ADO highlights the importance of agriculture in economic development in Asia but the agriculture productivity in Nepal has decelerated to 0.7 per cent from last year’s 1.1 per cent.

“Second green revolution is needed,” Heytens said, giving emphasis on the job creation that has been very slow in Nepal.

Though, the overseas employment has emerged as a safety valve, its short term only.

For the long-term development, Nepal must have a proper Labour law to lure back the workers home. “Labour Act 2002 is rigid for rationalising business operations and inadequate for protecting worker’s interest,” he added.

Domestic labour market needs reform for the better relationships between the employees and employers and for the long term development of the country.