Kathmandu, July 16
The Asian Development Bank (ADB) has said that Nepal’s economy will grow by 4.5 per cent in fiscal 2015-16, down from the earlier projection of 5.1 per cent growth, as a result of the economic activities getting disrupted by the catastrophic earthquake of April 25.
‘Asian Development Outlook Supplement’, unveiled today by the Manila-based multilateral development agency, has said that while the timing of the earthquake in the last months of fiscal 2014-15 left growth outcomes decent, forecasts for growth for the fiscal has been revised down to three per cent from 4.6 per cent earlier.
As per ADB, the earthquake caused widespread destruction in the Capital and to other infrastructure, severely disrupting economic activities and substantially hobbling growth prospects.
However, the government through fiscal budget 2015-16 has projected that economic growth will stand at six per cent in fiscal 2015-16, as the country is going to spend Rs 91 billion in reconstruction during next fiscal year.
The Central Bureau of Statistics (CBS) of the government has revised the growth rate at 3.04 per cent for fiscal 2014-15 after the earthquake that hit the capital city of the country among other districts of the central region. As a part of its Post Disaster Needs Assessment report, CBS had released preliminary estimates of the macroeconomic impact of the April earthquake.
The earthquake struck Nepal in the 10th month of fiscal 2014-15, causing major impact on the growth of service sector that accounts for about half of the gross domestic product (GDP). The sector is expected to grow by 3.9 per cent, compared with six per cent projected for a normal scenario.
The subsectors worst affected are wholesale and retail trade; tourism including air transport, hotels, and restaurants; education; and real estate renting and business activities.
The government estimates that full recovery of the total damage and loss worth Rs 667 billion, will take at least five years.
Likewise, ADB has forecast that the country will bear inflationary pressure in next fiscal due to disrupted economic output and goods supply.
A version of this article appears in print on July 17, 2015 of The Himalayan Times.