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Pratiman-Neema Memorial Foundation (PNMF), a non for profit organization based in Rupandehi, Province 5 and Institute for Integrated Development Studies (IIDS) jointly released publication- Nepal Economic Outlook 2017-18 and data portal- NepStat of IIDS at Pratiman-Neema Memorial Foundation last Sunday, Siddharthanagar Rupandehi, Province 5 in the presence of eminent personalities having interest in Nepali economy.
This joint collaboration of release program between Pratiman-Neema Memorial Foundation and IIDS was a great initiation of partnership at the provincial level to get an overview of the economic situation from interactive discussion with policy makers, academicians, scholars, professionals, students of this region and plan for future collaborative work for provincial level economic outlook.
The study report Nepal Economic Outlook 2017-18 forecasts real per capita Gross Domestic Product growth rates of the country for FY 2018-19 and FY 2019-20. Under the baseline scenario (without policy interventions and shocks), GDP growth rate in FY 2018-19 is expected to remain at 4.2 percent and is forecasted to increase to 4.9 percent. Similarly, under the alternative scenario of recurrent and capital expenditures expected to grow at the rates of 17.9 percent and 26.9 percent respectively, GDP growth is forecasted to remain at 4.5 percent and 5.2 percent in FYs 2018-19 and 2019-20 respectively.
The agriculture sector, which still serves as the major economic sector in terms of people’s involvement, contributing 29.52 percent to the real GDP. Lower in 2.38 percentage points than previous year due to negative growth of 1.5 percent (y/y) in the paddy production which is the main cereal crop that accounts for 20.75 percent of gross value added of agriculture sector in FY 2018 due to unfavorable monsoon. However, other cereal crops recorded acceleration in the production-maize (9.40 percent, y/y), wheat (9.65 percent, y/y), and millet (2.54 percent, y/y) due to commercialization of agriculture, expansion of irrigation, and availability of fertilizers and seeds.
The industrial sector, which accounts for 14.21 percent of real GDP, performed strongly in FY2018, accelerating to 8.82 percent (y/y) growth from 12.41 percent (y/y) expansion in FY2017 because of regular supply of electricity, improvement in post-earthquake reconstruction and other construction activities, and an increase in the production of manufacturing sector.
The government revenue has registered the second highest growth rate of 21.42 percent (y/y) for the first nine months of FY2018 since the corresponding period of FY2013 owing to the robust growth in both tax and non-tax revenues. Similar to the first nine months of the last five fiscal years, value added tax and income tax accounted for almost 50 percent of the revenue mobilization in the same time of FY2018. The balance of payments deficit stood at NPR 14.60 billion which is 0.49 percent of GDP for the first nine months of FY2018 compared to the surplus of NPR 69.11 billion (1.92 percent of GDP) during the same period in FY2017, a whopping drop of 121.13 percent as current account deficit widened.While merchandise exports registered the lowest negative growth of 12.77 percent, since the end of the trade disruptions in three months ending mid-July, 2017. After this trough, exports grew by double digits growth rate and continued to grow at this rate till mid-March, 2018. Following this, exports have slowed down; it picked up by only 2.33 percent in three months to mid-April 2018 compared to the same time the year before.
This edition of Nepal Economic Outlook focuses on two key infrastructure: social (education) and physical (energy). In social infrastructure, we focus on the institutional reform of public education in Nepal, which we believe can potentially improve the quality of public education. The reason for focusing on such reform instead of increasing allocated budget in the education sector comes from two reasoning: i) increasing budget allocation to education sector puts pressure on already existing budget deficit and ii) if the root of the problem is at governance and structure of public school system then added resource allocation is not going to have impact on improving quality of public education in Nepal.
In physical infrastructure, ‘ We discuss about the increasing dependence of Nepal on foreign countries, particularly India, for electricity and fossil fuels, We also suggest ways to reduce these dependencies, for example, harnessing hydropower and using domestically produced electricity for transportation, cooking, lighting, and industrial use, Swati Thapa CEO of PNMF daid.The electronic version of Nepal Economic Outlook 2017-18 can be downloaded from IIDS website, She added.
Pratiman Neema Memorial Foundation (PNMF) is a non- profit organization established in 2003 focuses on three main platforms- Academics, Research and Community Engagements to bring together people and institution to work on creative and sustainable ideas. At the same time PNMF along with its collaborators is deeply focused on the up lifting of underprivileged, uneducated and economically back warded community. To complete this mission several activities are conducted in different communities regarding awareness, skill development and economy. PNMF works collaboratively with different institution locally, nationally and globally and IIDS is one of the leading private non-profit and non-partisan think tank in Nepal. Nepal Economic Outlook is IIDS’ flagship publication that analyses the state of Nepal’s economy and makes growth forecasts for major macro variables.
Highlights of Program
– Honorable Vice-Chairman of Planning Commission of Province 5, Dr. Prakash Shrestha was the chief guest of the event. Mr. Thaneshwor Gautam, Secretary of Ministry of Economic Affairs and Planning was the special guest and Mr. Hari Adhikari, Mayor of Siddharthanagar Municipality chaired the program.
– Mr. Gulab Dhawal, Assistant Director of Nepal Rastra Bank, Rupandehi, Province 5 emphasized that primary field level data should be used to inform policy makers instead of only using the historical data.
– Mr. Thaneshwor Gautam, Secretary of Ministry of Economic Affairs and Planning emphasized the importance of reliable data in decision making especially for revenue sharing and funding allocation among three levels of government: Central, State and Local government.
– Dr. Prakash Shrestha, Vice-Chairperson of Planning Commission of Province 5, mentioned that there is a revival of economic activity in Nepal with hope of stable government and this is illustrated by increase in demand of loans in Banks. He also precisely mentioned that Pratiman-Neema Memorial Foundation is doing a great valuable research work in Siddharthanagar and they should extend their high value work in all 12 districts of Province 5 to carry out research activities and Provincial Government would always support the initiative of Pratiman-Neema Memorial Foundation. He also congratulated Pratiman-Neema Memorial Foundation for organizing and leading policy deliberate platform at Province 5 and jointly releasing Nepal Economic Outlook and Nepal Outlook database together with IIDS.
– Mr. Hari Adhikari, Mayor of Siddharthanagar Municipality, mentioned that local government is committed to work in various field to improve the economic condition of Siddharthanagar Municipality. He also mentioned that this program has helped him to realize the importance of reliable data for effective policy making.
– Dr. Dhurba Bhandari, Senior Economist mentioned that IIDS is committed to do policy research and maintaining database at the provincial level of Government.
– Ms. Swati Thapa, Executive Director of Pratiman-Neema Memorial Foundation highlighted the importance of PNMF is extending the partnership with other organizations like IIDS to increase the impact of its research and other project activities. She also mentioned that PNMF is not only promoting the technical education in Siddharthanagar but also collectively working as the research initiator of this region. It has been growing as the holistic platform for students, researchers, Policy makers and community leaders for deliberation, analysis and development of the competent society promoting sustainable development.