UNESCAP projects 4.6pc growth in current fiscal

Kathmandu, May 8

At a time when the government is expecting 6.94 per cent growth as per the recent forecast of Central Bureau of Statistics, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) has come up with a more conservative outlook that the Nepali economy will grow only by 4.6 per cent in this fiscal and 4.8 per cent in next fiscal.

UNESCAP has identified increased public expenditure for the post-quake reconstruction and low base of economic growth for consecutive two fiscals as the major factors for the aforesaid forecast.

“The growth outlook is set to improve from this fiscal. Overall exports should improve owing to an expected economic rebound in India, which accounts for about 60 per cent of total shipments,” the UNESCAP report titled ‘Economic and Social Survey of Asia and the Pacific 2017’ unveiled today said, “Exports of garments and apparel would also benefit from duty-free access granted recently by the US.”

The report has further said that the consumer spending is expected to grow steadily amid stable agricultural income, while fixed investment growth is underpinned by gradual reconstruction efforts.

“The medium-term outlook is supported by policy reform efforts to enhance the business environment, such as streamlining tax administration and offering new investment incentives,” according to the report. “Ongoing construction of hydropower projects will also help the economy to reap the dividends of its abundant resources and spur manufacturing growth.”

Low base for consecutive two fiscal years is one of the major reasons for rebound of economic growth. Inadequate implementation capacity and procedural bottlenecks impeded government spending in two consecutive fiscal years.