Friday, June 6, 2008

Good economic news for Nepal

Finally, after some years of stagnation, Nepali economy is set to rebound. The central bank predicts that GDP would grow by 4% this fiscal year, thanks to a 6% expected increase in agricultural outputs and a 14% rise in tourism. However, inflation still poses a challenge.

"The Nepal Rastra Bank (NRB) has predicted national output to grow by 4 percent in the current fiscal year, thanks mainly to a record agricultural growth of 6 percent, the highest in 13 years.

Despite a wonky manufacturing sector, the impressive rebound by the agriculture sector along with an almost 17 percent growth in tourist arrivals contributed to the economic expansion, according to the central bank's economic report that covered the first nine months of the running fiscal year.

However, a record high inflation, which looks to be marching toward double digits, has painted a bleak picture of the economic outlook. The year-to-year consumer inflation stood at 8.9 percent in mid-April 2008 compared to 5.6 percent in the corresponding period last year, said the report."