Average income of each Nepali is expected to grow by 13.77 per cent to Rs 71,305 this fiscal year, as healthy growth recorded by the agricultural sector is projected to give a fillip to the country’s economy, raising it by over five per cent.
Preliminary figures released today by the Central Bureau of Statistics show that the gross domestic product will expand by 5.15 per cent this fiscal. The CBS growth estimate is lower than the government’s economic growth forecast of 5.5 per cent but higher than the prediction of 4.5 per cent made by the International Monetary Fund, the World Bank and the Asian Development Bank.
If CBS’s GDP growth projection comes true, the growth rate would surpass five per cent mark for the first time since 2007-08 when the economy had expanded by 5.8 per cent.
The CBS came up with this fiscal’s growth estimate based on prediction that the GDP will hit Rs 1.93 trillion, meaning the country is likely to produce goods and services worth Rs 1.93 trillion this fiscal, as against Rs 1.69 trillion in the last fiscal.
“We made this forecast based on rise in agricultural yields because of favourable monsoon,” CBS Director General Bikash Bista told journalists.
The agriculture and forestry sector is expected to grow by 4.72 per cent this fiscal, as against the growth of 1.07 per cent recorded in the last fiscal, according to CBS data. The sector’s growth is fuelled by 12.04 per cent increase in paddy output and 9.85 per cent rise in maize yields.
Since the agriculture and forestry sector makes one of the biggest contributions to the GDP, slight change in outputs tends to affect GDP. Agriculture and forestry sector’s share in the GDP is expected to stand at 30.27 per cent this fiscal, slightly lower than the last fiscal’s 31.19 per cent.
Similarly, wholesale and retail trade, which makes the second largest contribution to the GDP, is expected to grow by 8.83 per cent, as against the last fiscal’s 6.79 per cent. Likewise, transport, storage and communications sector is expected to expand by 7.52 per cent compared to the last fiscal’s growth of 7.42 per cent.
Although growth recorded by these sectors is likely to increase average per person income by 13.77 per cent in terms of Nepali currency, per capita gross national income, in terms of US dollars, is expected to go up by a moderate $4 to $717 during the period because of depreciation in the value of Nepali rupee vis-a-vis greenback.
The rise in income level definitely reflects that Nepalis are getting richer. Yet what is startling is the growing contribution of consumption to the GDP, which is expected to hit 91.08 per cent, as against the last fiscal’s 89.90 per cent. This hike in consumption spending will pull down gross domestic savings — estimated to stand at 8.92 per cent of the GDP.