ADB forecasts 6.2 percent economic growth for Nepal;  EU pledges to support sustainable growth of Nepal

Kathmandu / March 28: The Asian Development Bank (ADB) has projected that the country’s economic growth will be between 5.2 to 6.2 percent in 2017.

The ADB shared this information organizing a news conference here today. It estimated that the GDP increase in terms of basic price in the Fiscal Year 2017/18 will be that much. The Bank also forecast that the inflation will remain be between 6.0 to 6.5 percent, less than the government target.

Although the service sector has shrunken due to the decrease in remittances, an encouraging economic outlook than had been predicted earlier has been ensured due to the maximum growth in agricultural production, the prospects resulting from momentum the post-earthquake reconstruction picked up in the last two quarters of the Fiscal Year 2017/18 and the improvement in the investment climate, the ADB stated.

ADB Country Director Kenichi Yokoyama said the industrial production is expected to increase due to the notable improvement in power supply and the production activities taking up speed again.

He said the activities in the service sector might shrink than the possible level due to the marginal impact of the reduced inflow of remittance and the demonetisation of large denomination currency notes in India.

Chief economic analyst at the ADB, Sharad Bhandari said the capital expenditure performance was not encouraging even up to the six months into the current Fiscal Year and the trend of monthly expenditure resembled that of the previous years. He added that the government was weak in budget implementation aspect.

The ADB has suggested starting further reforms in the actual practices and procedures of mobilizing foreign investment, in the approval, visa granting and repatriation of the profit of such investment, removing the duplications in the institutional terms of reference and adoption of automated system for foreign investment.

It also suggested that more initiatives were needed to protect intellectual property rights and serious efforts, including legal measures, had to be put in for creating a climate of healthy industrial relations.

Meanwhile, ADB Country Director Yokoyama is leaving for India upon completion of his five-year term here. He has been transferred as the ADB’s Country Director for India.

EU pledges to support sustainable growth of Nepal

Meanwhile, the European Union has pledged to support sustainable and inclusive economic growth and social justice in Nepal.

Issuing a statement on the occasion of the anniversary of Rome Treaties, Head of the Delegation of the European Union in Nepal, Ambassador Rensje Teerink, said that the people-to-people relationship between the EU and Nepal lies at the core.

The European Union (EU) on 25th March marked 60 years since the signature of the Rome Treaties, the first step towards a united Europe.

The 60th anniversary of the Rome Treaties is the opportunity not only to reaffirm our commitment to the values and objectives on which the European project is founded but also to take pragmatic and ambitious steps forward, adds the statement.

The EU’s partnership with Nepal has deepened since the cooperation agreement was signed in 1994. The EU is Nepal’s biggest bilateral grant donor, covering a wide array of sectors: rural development, health, education, heritage, trade facilitation and reconstruction.

As is the case for all LLDC countries, Nepal enjoys zero tariff access to the EU markets under the ‘Everything But Arms’ scheme. Capacity building for farmers and other producers has greatly improved Nepal’s competitiveness. Such close links and ties between countries are still of utmost importance, not least at a time when the world is going through a period of great uncertainty: the global balance of power is shifting and the foundations of a rules-based international order are too often being questioned.

“The EU is increasingly active as a global security provider and we will continue to be a strong, cooperative and reliable partner. We stand for multilateralism, for human rights and for international cooperation”, she noted. RSS