Quality improvement in country’s economy: growth estimated to be seven per cent

Finance MinistryKathmandu / May 28:The Government has estimated the economic growth of the current fiscal year to increase by 6.94 per cent.

According to the Economic Survey 2016/17 released by the Ministry of Finance here today, favourable climate leading to rise in agriculture productivity, increase in capital expenditure, energy management and improvement in atmosphere for investment has had an overall improving effect on the economy.

The growth rate is the highest in the past 23 years. The economic growth last fiscal year stood at 0.01 per cent due to the earthquake and the border blockade. The growth is estimated to be 5.29 per cent and 7.74 per cent in the agriculture and non-agriculture sector respectively. It was 0.03 per cent and 0.16 per cent respectively last year.

Likewise, the service and industry sector is expected to grow by 6.9 per cent and 10.17 per cent respectively. The structure of the economic is also changing as the percentage of service sector is increasing in the size of the economy, according to the survey.

It is also estimated that there would be contribution of 29.37 per cent and 70.63 per cent of agriculture and non-agriculture sectors respectively in the Gross Domestic Production during the period. Similarly, consumption percentage would be 89.7 in GDP while it was 96.18 percent last year.

Likewise, the per capita GDP is expected to increase by 6.1 per cent in the current fiscal year as compared to previous fiscal year and reach 28,733. Per capita income has reached 862 US dollars against 757 USD last year.

Inflation rate is expected to remain the lowest this year as compared to previous years due to increase in agro production and improvement in overall import. Average inflation rate of the first eight month of the current fiscal year is 5.1 per cent which was 9.7 per cent in corresponding period of the previous fiscal year.

Out of released budget worth approximately Rs 1048.92 billion, a total of Rs 400.16 billion have been spent in the first eight months including Rs 293.42 billion or 73.32 percent under current expenditure, Rs 67.83 billion (16.95 per cent) under capital expenditure and Rs 38.51 billion or 9.73 per cent under financial management).

According to the survey, revenue worth Rs 212.4 billion has been collected, an increment by 35.76 percent as compared to last FY. Of the grant commitments of foreign assistance, 21.5 percent is grant and 78.5 per cent is loan assistance.

The export of goods increased by 12.8 per cent to reach Rs. 48.22 billion while import rose by 44.2 per cent to reach 628.56 billion. As a result, the total trade deficit has increased by 47 per cent to reach Rs. 580.34 billion. RSS

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