World Bank revises Nepal’s economic growth rate to 7.5 per cent

KATHMANDU — The World Bank has revised Nepal’s economic growth Nepal’s and said the growth rate has reached 7.5 percent in the fiscal year 2017 due to good agricultural output, elimination of power cuts and higher government spending, among others.

Earlier, the World Bank had projected Nepal’s economy to expand by 6 percent in 2016-17.  This is the highest economic growth rate in the country since 1994.

“About half a million households, eligible to receive housing reconstruction grants, have received the first of three tranches. Second tranche payments have started and are expected to pick up by the end of fiscal year 2017. And a series of management reforms has eliminated power cuts in several major cities across Nepal,” the WB has said in a press statement issued on Thursay,

The World Bank has said that the best monsoons in recent years, increased availability of electricity, and greater investment as the earthquake reconstruction gathered momentum are said to be behind such progress.

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Transport has revived while wholesale and retail trades have normalised, according to the WB update.

Tourism is also recovering, with arrivals reaching pre-crisis levels during the September-December 2016 tourist season. Inflation has decelerated primarily due to the normalisation of imports and moderating inflation in India as a result of demonetisation, statement reads.

However, country’s exports remain slow due to sluggish India-bound exports and continued appreciation of the effective exchange rate resulting in the trade deficit.

“Government revenue and spending have performed well,” said Takuya Kamata, the World Bank’s Country Manager for Nepal. “Revenue has exceeded the six months’ target and spending, including on capital goods, has also significantly picked up compared to previous years and is on par with revenue.”