Kathmandu, November 15: The government has trimmed down the economic growth target for the current fiscal by 1.49 percentage points to 7.01 percent.
Such revision was made in a report published by the Ministry of Finance (MoF) yesterday. Earlier, the Ministry of Finance had set an ambitious 8.5% growth target for the current fiscal through the budget for FY2019/20.
The newly revised growth projection is backed by the anticipation of a decline in agricultural production this year as well as the low level of capital expenditure. The paddy production is estimated to plunge by around 8% in 2019-20 as it has been hit by a volley of problems like delayed monsoon, fertilizer shortage, supply of faulty seeds and armyworm invasion. Any drop in agriculture output is bound to negatively affect the entire economy, as it has a 28.5 percent stake in the country’s GDP.
Meanwhile, the government has also not been able to improve its capital expenditure, thus alluding to low development and economic activities across the country. In the first three months of this year, the government was able to spend Rs 18.36 billion which is a mere 4.41% of Rs 408 billion allocated for the development works in the current fiscal year.
Earlier, the World Bank, in its report entitled South Asia Economic Focus, had forecast Nepal’s economy to grow by 7.1 percent in the ongoing fiscal year. Likewise, the Asian Development Bank had projected the growth rate at 6.3 percent for the same fiscal.
