KATHMANDU (April 30):
Nepal’s economy is expected to expand 4.01 percent in the current fiscal year 2020/21, according to a preliminary estimate of the Central Bureau of Statistics (CBS).
Releasing the latest National Accounts Statistics on Friday, the CBS said that it forecasts the country’s annualized Gross Domestic Product (GDP) to grow by 4.01 percent to climb to Rs 4.266 trillion in the current fiscal year.
According to the CBS, the preliminary estimate is based on available information and figures of seven to nine months of the current fiscal year.
The growth projection of the CBS comes at a time when the country is bracing for the second wave of Covid-19 and prohibitory orders enforced by local administrations in over a dozen districts to contain the spread of coronavirus.
CBS officials say that their projection is based on an assumption that all economic activities will operate in normal condition after two weeks.
“Our estimates are based on assumption that the current prohibitory period will not last more than two week, and the economy, barring hospitality and leisure sectors, will be back to normal,” Ishwori Prasad Bhandari, a director at the CBS, told New Business Age.
“If our assumption fails and the impact of the Covid-19 lingers on, we will later revise our estimates and figures,” he said.
The preliminary estimate of the CBS for the current fiscal year is higher than the projections made by international institutions like the World Bank, the International Monetary Fund (IMF) and the Asian Development Bank (ADB).
The IMF recently projected Nepal’s growth to grow by 2.9 percent while the World Bank put the growth forecast at 2.7 percent. Earlier on Wednesday, the ADB said that Nepal’s GDP is anticipated to grow by 3.1 percent in the current fiscal year.
According to CBS officials, ‘base effect’ has also helped to prop up economic growth in the current fiscal year.
“The country’s economic growth fell to negative territory in the last fiscal year. So,even when the economic activities haven’t gained momentum after the lockdown, a slight increase in the production helped in propping up growth figures,” said CBS Director Bhandari.
However, the growth estimate of the CBS is a way lower than the government’s economic growth target. Even when the country was under lockdown to contain the spread of coronavirus, the government in its annual budget speech had set a target of 7 percent economic growth in the current fiscal year.
The CBS also revised down its growth for the last fiscal year 2019/20 to -2.09 percent. Earlier last month, CBS had forecast a growth contraction of 1.88 percent.