KATHMANDU, July 13: Although slower economic growth, near double-digit inflation, ballooning trade deficit and marginal growth of the dominant agriculture sector marked the fiscal year 2012/13, per capita income of Nepalis edged up to Rs 62,797 from the Rs 58,274 recorded last year.
However, per capita income in dollar terms declined marginally to US $721 from US$742 last year, thanks to a weakening of the Nepali rupee against the greenback.
The Economic Survey 2012 made public by Finance Minister Shankar Koirala at a function today, shows that the national economy has expanded to Rs 1,701 billion though economic growth has been recorded at 3.6 percent at basic price, the lowest in recent years. The government had initially targeted achieving 5.5 percent growth.
“Decline in agricultural output played a major role in dragging down economic growth this year. Growth of the non-agriculture sector was not impressive though the industrial climate has been gradually improving,” said Koirala.
The government estimates that during the current fiscal year, the farm sector and non-farm sector grew by 1.3 percent and 5 percent respectively.
Imbalance in supplies due to an almost double-digit decline in key farm products jacked up inflation to 8.2 percent by mid-June this year as against the government´s target of containing it at 7.5 percent.
“Though we couldn´t keep inflation within our target, the average inflation rate could not touch the double-digit mark in the current fiscal year,” he said.
Skyrocketing trade deficit, which touched Rs 438.67 billion during the first 11 months of the current fiscal year, has been identified as another challenge in the economy. “Imports have been spurred by increasing disposable income, and dependence on imported goods in the domestic production system has gone up,” said Koirala.
Revenue mobilization reached Rs 280 billion as of July 10 this year, which is close to the target of Rs 289 billion for the current fiscal year.
However, the government has failed to spend as per the target set for the year. Though the government announced a budget of Rs 404.82 billion for the current fiscal year, only Rs 317 billion was spent by July 10, excluding expenditure reported in 15 districts where the Treasury Single Account (TSA) system has not been implemented.
“We couldn´t spend the targeted amount as we couldn´t announce the budget on time,” he said.
However, a balance of payments surplus of Rs 52.69 billion, a 21.3 percent rise in remittance inflow to touch Rs 388.46 billion. and record high foreign exchange reserves worth Rs 511.69 billion at the end of the current fiscal year have brought cheer among officials.
The Economic Survey also shows that the share of consumption in the Gross Domestic Product (GDP) increase to 90.7 percent this year from 87.3 percent recorded last year.
During the first eight months of the current fiscal year, the government added 1,987 km transmission lines, 128 km black-topped roads, 169 km gravel roads and 194 km earth roads despite the low spending capacity of the government due to late announcement of a full budget.
During the corresponding period last year, the government had constructed 15 km black-topped, 45 km gravel and 185 km earth roads. The total strength of the road network across the country has increased to 24,573 km.
The number of telephone users by the end of the first eight months of the current fiscal year reached 19.6 1 million with mobile phone users covering over 85 percent of that figure. As of the end of the same period last year, the total number of telephone subscribers was recorded at 15.61 million with mobile users constituting 83 percent.
However, the government achieved a marginal rise in school enrollment. Enrolment in primary and secondary schools was 95.3 percent and 32.4 percent, up from 95.1 percent and 30.6 percent respectively last year.
Despite the adverse economic climate in the country, the government succeeded in adding 1,256 new schools, including 417 primary schools, 656 lower secondary and 183 secondary, over the year.
The government could add only two new hospitals and 250 hospital beds during the first eight months of the fiscal year. The total number of health institutions across the country, including big hospitals and health posts, stood at 4,393 at the end of the eight months.
Despite the unimpressive progress in health infrastructure, the infant mortality rate during the year dropped to 9 per 1,000 live births and maternal mortality rate declined to 229 per 100,000. Mother-child health programs launched by the government are major contributors towards controlling infant and maternal mortality in the country.
The government has been able to increase power generation by 41 MW during the first eight months of the current fiscal year to bring it up to 746 MW. Prolonged load-shedding, frequent labor strikes and shortage of workers have crippled the industrial sector. However, the service sector has shown some improvement.
Economy at a glance:
· GDP growth rate: 3.6% at basic price
· Economy size: Rs 1,701 billion
· Inflation: Approx. 8.2%
· Per capita income: $721
· Growth of agriculture sector 1.3 percent
· Non-agriculture sector growth 5 percent
Social Sector at a glance:
· New hospitals, health posts: 2 hospitals
· Newly added hospital beds: 250 beds
· Infant mortality rate: 9/1000 live births
· Maternal mortality rate: 229/100,000
· New schools: 1,256
· Enrollment in primary education: 95.3%
· Freshly added roads: 491 km
· Telecom service subscribers: 19.61 million