The Asian Development Bank (ADB) has come up with another new announcement on Nepal’s economic growth.
In its latest Nepal Macroeconomic Update released on April 03, 2019, ADB projected Nepal’s economic growth rate at 6.2 percent for FY 2018-19 and 6.3 percent for 2020.
Though there is only a slight rise in projection from 2019 to 2020, ADB says the Himalayan nation can achieve more, and in a sustained manner.
“The outlook is for a stable growth on the back of strong domestic demand, fueled by a larger budget allocation to sub-national governments and accelerated post-earthquake reconstruction,” said ADB Country Director for Nepal Mukhtor Khamudkhanov.
However, the country needs to address some challenges for smooth implementation of fiscal federalism and maintain fiscal discipline to achieve the expected growth.
“Challenges to smooth implementation of fiscal federalism and maintaining fiscal discipline at large could pose potential risks to the outlook. Nepal has the potential to achieve and sustain higher growth rate over a long period of time if these challenges are addressed,” Mukhtor adds.
ADB projects a positive outlook for the agriculture sector, which is likely to grow up to 4.5 percent from 2.8 percent of the previous year, favored by monsoons.
This monsoon season is expected to boost Nepal’s paddy production to 5.5 million tons, giving an 8.4 percent year-on-year rise.
Industry sector is another area poised for a growth rate, at around 7.1 percent supported by enhanced power supply and favored investment climate.
Services sector is also expected to grow by 6.4 percent in FY 2019 as a result of positive trend in wholesale & retail trade and hotel industry, among other related areas, the report added.