Print Edition - 2014-11-11 | MONEY
IMF predicts 5pc growth for Nepal
Nov 10, 2014-The International Monetary Fund (IMF) has projected Nepal’s economy to grow 5 percent in the current fiscal year against the government’s target of 5.5 percent.
The global monetary body said an increase in the services sector due to remittance induced consumption will help the economy to rise at that level. In the last fiscal, the economy had grown 5.5 percent due to a good monsoon, said the IMF.
According to the latest South Asian Regional Update published by the IMF, Nepal’s economy will grow faster than that of Afghanistan, Maldives and Pakistan but slower compared to that of other South Asian countries.
The average South Asian economic growth rate will reach 6.1 percent, said the report. Bhutan is expected to show the highest growth rate of 7.6 percent followed by Bangladesh, Sri Lanka and India.
Nepal has been one of the lowest performers in economic growth over the last six years, recording a low of 3.4 percent in fiscal 2010-11 and a high of 5.5 percent in fiscal 2013-14. Pakistan has also been consistently poor in GDP growth. The highest growth this country achieved was 4.1 percent in fiscal 2013-14 and the lowest 0.4 percent in fiscal 2008-09.
According to the report, Nepal’s inflation is expected to moderate to 7.8 percent this fiscal from 9 percent in the last fiscal. Stating that India’s inflation will moderate in the current fiscal year, Nepal will follow suit as two-thirds of its trade takes place with the southern neighbour.
Still, inflation will remain at a higher level compared to other South Asian countries. After Bhutan and Pakistan, Nepal’s inflation is projected to remain the highest. Over the last six years, inflation in the entire South Asian region has remained on the higher side except in Afghanistan and Sri Lanka.
Although remittance growth is expected to moderate during this fiscal year, the current account will record a surplus, further boosting foreign exchange reserves.
Published: 11-11-2014 13:53