My former colleague Prem Khanal writes in The Kathmandu Post...positive news on food production and capital mobilization, stalemate in the manufacturing sector, and general prices rising up (more than 7%)...(by the way, did I tell earlier that I learnt the basics of journalism from Prem while working at the Post):
Leaping revenue mobilization, rising capital expenditures, reviving demands and continuing healthy remittance inflow give positive indications for the fragile economy. However, sluggish growth, creeping inflation, widening trade deficit, mounting loss due to rising oil prices and nasty power outages could jeopardize the course of revival.
Propelled by strong growth in major agro products like paddy, maize and millet, which jointly represent nearly 30 percent of national agro outputs, the total agriculture production is likely to go up by 5.2 percent, highest since 2003/04 and more than the Interim Plan's target of 3.3 percent.
Production of paddy, which has a 20 percent share in national agriculture output, is estimated to soar by almost 17 percent, thanks largely to good monsoon.
Based on overall performance of the economy during the first three quarters, officials at CBS expect economic growth rate to remain around 3.5 percent, less than the budgetary target of 5 percent.
An astonishing 25 percent growth in revenue mobilization, amid slow economic growth, has been the most remarkable achievement of the government. As the government has already mobilized more than Rs 75 billion revenue till April, which is 70 percent of the revised target of Rs 106.6 billion for the current year, it is likely to meet the renewed target.
Creeping inflation, which crossed 7 percent mark, two percentage-points more than budgetary target, has emerged as the central challenge for the monetary authority. A whooping price rise of almost 20 percent in rice, which commands almost 15 percent in consumer basket, and a 27 percent rise in oil price are some of the factors that inflated the inflation figures.
Notwithstanding a 20 percent rise in trade deficit on the back of shrinking exports and booming imports, the current account posted a surplus of Rs 10.4 billion, thanks to continued strong 28 percent rise in remittance incomes.
