Editorial: Growth outlook
The government needs to improve its spending efficiency to fully utilise the development budget allocated for the given fiscal year
There is something to cheer about this fiscal. The country’s economy is expected to grow by about 6.9 percent, the highest growth rate over the last 13 years since 2003/4. Last fiscal year recorded the lowest growth rate at 0.01 percent due to crippling impact of the devastating earthquake in 2015 and subsequent five months long economic and border blockade and agitation in Tarai-Madhes. Last time it was in 1993/94 when the country witnessed the highest growth rate at 8.2 percent, according to Central Bureau of Statistics (CBS), which started calculating the gross domestic product from that fiscal. The CBS has said that 6.9 percent growth rate became possible as a result of favourable rainfall during previous monsoon, which contributed to increment of paddy production, the main staple food, regular supply of electricity for domestic and industrial consumption, lesser number of political strikes and supply of construction materials for post-earthquake reconstruction. The main contributing factor to the robust economic growth can be attributed to fair monsoon rains that helped increase the agriculture production. The CBS has prepared the preliminary growth projection based on the actual data of the first half of the fiscal and estimated data of the remaining second half.
However, projection of 6.9 percent growth rate has been based on last year’s growth which went negative due to natural disaster and political disturbances, including the economic blockade at the border points. Actually, the growth rate of this fiscal has been estimated at around 5.29 and 7.74 percent in agriculture and non-agriculture sectors respectively. Hence, the total capital formation will be at around 33.8 percent as compared to 28.8 percent of the last fiscal. The CBS has also estimated that the per capita income of a Nepali is to stand at $865 this fiscal, which is a positive sign. The government has set a target to achieve further growth rate to graduate to a middle-income country by 2030. The main challenge that lies ahead is to maintain the growth rate in the coming fiscal years. It all depends on how the country’s political situation moves ahead. It will not be a big challenge to keep intact the current growth rate provided that new constitution is implemented by holding three tiers of elections by January 2018.
Regular supply of electricity, favourable monsoon and relatively peaceful political condition may be attributed as positive factors to the economic growth compared to the previous fiscals. In order to maintain this growth rate, the government has to play a catalyst’s role by increasing its spending capacity in infrastructure development and national priority projects. The government is the largest employer that can create thousands of jobs every year by making huge investments in national, regional and local-level development projects. The government needs to improve its spending efficiency to fully utilise the development budget allocated for the given fiscal year. Efficiency of the government can be increased after three tiers of elections – local, provincial and parliamentary – are held within the deadline set by the new constitution. Desired level of economic growth can be achieved provided that the country moves toward political stability through the elections of people’s representatives at all levels.
Nepal is reported to be closer to eradicating malaria, i.e. by 2025. It was disclosed at a function held in the capital to release a report on the prevalence and geographic spread of malaria from 2013 to 2016 on the occasion of World Malaria Day on Tuesday. The report says that 2,603 cases of malaria were brought into the country from outside, while 2,988 cases occurred locally between 2013 and 2016.
But innovative ways might be considered and tried to reduce the risk. Now the department is reported to be waiting for WHO guidelines for making specific intervention against the plasmodium vivax, the parasitic protozoan that causes malaria. But no hurry should be made in announcing that Nepal is closer to eradicating malaria or has even done so. Anti-malaria campaigns had been started in the country decades ago, and something like eradicating or nearly doing so had been publicized in the past. The same had been done in the cases of certain other diseases, which were later seen to have occurred in the country.