Industrial sector may have shrunk 6.3pc last fiscal: NRB report
Kathmandu, August 26
At a time when the government has been pushing for industrialisation to boost the economy, the industrial sector is believed to have shrunk 6.3 per cent last fiscal as against growth of 1.5 per cent in the previous year.
The setback was owing to the fall in demand of industrial goods due to the devastating earthquakes of 2015 and energy shortage along with the disturbances in supply of fuel and raw materials that took a major toll on the industrial sector in the fiscal year 2015-16, according to the latest macroeconomic data unveiled today by the central bank.
While the delay in monsoon, prolonged strikes and obstructions in the Tarai adversely affected the economy, the growth of agriculture sector outpaced that of non-agriculture sector.
According to Nepal Rastra Bank (NRB)’s Annual Macroeconomic Report 2015-16, the agriculture sector is expected to have grown 1.3 per cent whereas the non-agriculture sector is expected to have expanded 0.6 per cent. In the previous fiscal, the growth of agriculture and non-agriculture sectors stood at 0.8 per cent and 3.1 per cent, respectively.
At the same time, the annual average consumer price inflation stood at 9.9 per cent in 2015-16 compared to 7.2 per cent in the previous year. The year-on-year consumer price inflation stood at 10.4 per cent in mid-July compared to 7.6 per cent a year ago. The higher rate of increase in price indices of pulses and legumes, ghee and oil, clothes and footwear, spices, housing and utilities, among other sub-groups, exerted an upward pressure on overall consumer price inflation in the review year, the NRB report says.
In terms of ecological regions, the Kathmandu Valley witnessed a relatively higher annual average inflation at 11.6 per cent followed by hilly region at 10.4 per cent, mountain region at 8.8 per cent and Tarai region at 8.6 per cent in the review year. In the previous year, inflation was 7.2 per cent in Kathmandu Valley, 7.3 per cent in hilly region and 7.1 per cent in Tarai region. The inflation wedge between India and Nepal surged to 4.7 per cent as against 1.9 per cent in the previous fiscal 2014-15.
Meanwhile, the annual average salary and wage rate index increased 5.8 per cent in 2015-16. Such index had increased 8.4 per cent in the previous year. In the review year, the salary index and the wage rate index rose 0.8 per cent and seven per cent respectively, while the annual average of both salary index and wage rate index went up by the same rate of 8.4 per cent in the previous year.
Under wage rate, the annual average wage rate index of construction labourers, agricultural labourers and industrial labourers increased 9.7 per cent, 8.3 per cent and 3.6 per cent, respectively in the review year.
In terms of trade, merchandise exports in 2015-16 decreased 17.8 per cent to Rs 70.12 billion compared to a drop of 7.3 per cent in the previous year. At the same time, merchandise imports dropped 0.1 per cent to Rs 773.60 billion largely due to fall in import of petroleum products. Merchandise imports had gone up by 8.4 per cent in the previous year. The export-import ratio dropped to 9.1 per cent from 11 per cent in the past fiscal, the report says.
The current account registered a surplus of Rs 140.42 billion in the review year due to increase in net surplus in current transfer. The surplus in current account was Rs 108.32 billion in the previous year. Similarly, the overall balance of payments (BoP) recorded a significant level of surplus of Rs 191.24 billion in the review year on account of increase in current account surplus and capital inflows. The BoP surplus was Rs 145.04 billion in the previous year.
According to the preliminary estimates of the Central Bureau of Statistics (CBS), the real GDP at basic price is expected to grow 0.8 per cent in 2015-16 compared to a growth of 2.3 per cent in the previous year.
Similarly, the real GDP at producers’ price is expected to grow 0.6 per cent compared to a growth of 2.7 per cent in the previous year.
Remittance growth slows
KATHMANDU: The number of workers going abroad for employment, which directly affects the flow of inward remittance, decreased 18.4 per cent in fiscal year 2015-16, based on final approval, shows the latest central bank report. Consequently, the workers’ remittances grew 7.7 per cent to Rs 665.06 billion in the review year compared to a growth of 13.6 per cent in the previous year. However, the ratio of remittances to GDP increased to 29.6 per cent in the review year from 29.1 per cent in the previous year.