Print Edition - 2015-01-15 | MONEY
Nepal to grow at 4.8pc: WB
Jan 14, 2015-The World Bank (WB) has projected Nepal’s economic growth at 4.8 percent for this fiscal year—far lower than the government’s 6 percent target.
Although the government has announced a number of reforms programmes this year, the latest WB projection is even lower than last year’s growth rate. The WB estimated Nepal’s Gross Domestic Product grew 5.2 percent in the last fiscal year.
The report titled “Global Economic Prospects: Having Fiscal Space and Using It” has not given explicit reasons for the lower growth forecast, but stated Nepal faces considerable challenges on the expenditure side.
As of January 11, only 12 percent of the allocated capital budget has been spent, according to the Financial Comptroller General Office.
The global lender has also pointed out the challenges of unreliable electricity supply. It, however, said the recent electricity-related agreements with India would support Nepal’s growth outlook.
Recently, Nepal and India signed Power Trade Agreement, enabling the trade of electricity between the two countries like any other commodities. The Investment Board Nepal also signed Project Development Agreement with two Indian companies for the development of Upper Karnali Hydropower Project and Arun III Hydropower Project.
“There have been positive steps including about $2 billion worth of agreement between Nepal and India in 2014 that would help develop the latter’s hydropower resources and substantially raise electricity exports to India over the medium term,” read the report.
On taxation, the report has pointed out that Nepal’s tax base is one of the smallest in the region, which needs to be broadened. It stressed on the need for reviewing extensive tax exemptions and widely employed tax holidays.
Published: 15-01-2015 10:12