The nation´s economy would grow at an average of 5.2 percent over the
next three fiscal years till 2015 even if the situation in the country
remained the same, Institute for Integrated Development Studies (IIDS)
-- a Kathmandu-based think tank -- forecasted on Monday.
The agency, which has predicted the growth rate this year to remain at 4.6 percent, has attributed the higher growth to recent improvements in spending of capital expenditure.
“Capital spending over the past few years has consistently grown by 8 percent annually. This will spur private investment and enable the country enjoy an average growth of 5.2 till 2014/15,” reads a report that IIDS unveiled on the day.
The report has estimated the agriculture and non-agriculture gross domestic product (GDP) to average at 4.9 percent and 5.2 percent respectively over the next three fiscal years. For this year, it has projected agriculture sector to grow at 4.2 percent and non-agriculture sector to expand by 4.5 percent.
“Considering the recent growth trend, we assume the capital expenditure will reach 15 percent of the annual budget by the end of 2014/15,” the report states.
IIDS has also predicted inflation to average at 6.3 percent over the next three fiscal years. Though the forecast portrays better picture than the existing situation, IIDS has suggested that the central bank and the government to put in more serious effort to contain inflation.
“The inflation exerts pressure on common people´s daily lives. It should be handled with due care,” said Dr Bhavani Dhungana, one of the experts who released the forecast.
The report also sheds light on why key sectors of economy such as agriculture, industry, international trade and services have been performing weakly in recent period. “Input shortages, irrigation deficiencies and low allocation of budget in the agriculture sector have been adding woes to the sector,” the report said.
IIDS has urged the government to efficiently manage public resources and fine tune the capital budget so that it could contribute for better growth.
As for the declining contribution of manufacturing sector in the GDP, the report suggests the government to do away with existing weaknesses like low investment in the industrial sector, technological backwardness, infrastructure shortage and slow growth of small and medium scale industries, among others.
The agency, which has predicted the growth rate this year to remain at 4.6 percent, has attributed the higher growth to recent improvements in spending of capital expenditure.
“Capital spending over the past few years has consistently grown by 8 percent annually. This will spur private investment and enable the country enjoy an average growth of 5.2 till 2014/15,” reads a report that IIDS unveiled on the day.
The report has estimated the agriculture and non-agriculture gross domestic product (GDP) to average at 4.9 percent and 5.2 percent respectively over the next three fiscal years. For this year, it has projected agriculture sector to grow at 4.2 percent and non-agriculture sector to expand by 4.5 percent.
“Considering the recent growth trend, we assume the capital expenditure will reach 15 percent of the annual budget by the end of 2014/15,” the report states.
IIDS has also predicted inflation to average at 6.3 percent over the next three fiscal years. Though the forecast portrays better picture than the existing situation, IIDS has suggested that the central bank and the government to put in more serious effort to contain inflation.
“The inflation exerts pressure on common people´s daily lives. It should be handled with due care,” said Dr Bhavani Dhungana, one of the experts who released the forecast.
The report also sheds light on why key sectors of economy such as agriculture, industry, international trade and services have been performing weakly in recent period. “Input shortages, irrigation deficiencies and low allocation of budget in the agriculture sector have been adding woes to the sector,” the report said.
IIDS has urged the government to efficiently manage public resources and fine tune the capital budget so that it could contribute for better growth.
As for the declining contribution of manufacturing sector in the GDP, the report suggests the government to do away with existing weaknesses like low investment in the industrial sector, technological backwardness, infrastructure shortage and slow growth of small and medium scale industries, among others.
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