Saturday, 29 January, 2022

Nepal's economy grows despite COVID-19 Interruption


By Ajay Chhetri, Kathmandu, Jan 11: Nepal's economy grew in 2020/21 despite the interruption by the COVID-19 pandemic.

The Economic Activity Report (EAR) of 2020/21 of the Nepal Rastra Bank (NRB) revealed that agriculture, industry and service sector including the infrastructure have slightly improved in the fiscal year (FY) 2020/21.

Agriculture production grew as food and crops rose by 1.6 per cent in the review period. In this, vegetable production rose by 2.0 per cent while food and species rose by 4.6 per cent. Similarly, milk production rose by 5.3 per cent, meat production rose by 11.5 per cent and egg production rose by 36.7 per cent. Medicinal production rose by 30 per cent and wood production rose by 31.6 per cent.

In the review period, the capacity utilization of Industrial gradually enhanced. Consequently, the bank and financial institutions (BFIs) also encouragingly provided loans in the industries. The report revealed that BFIs provided 32.8 per cent of their aggregate credit to the industrial sector in the review period.

The rise in tourists, hotel, lodge, and credit flows triggered the growth of the service sector in the FY 2020/21. In the review period, 68 thousand 726 tourists arrived and the number of hotel and lodge increased by 9.4 per cent. The number of housing registration went up by 8.5 per cent consequently its revenue grew by 74.6 per cent.

In the review period, deposit of BFIs went up 20.5 per cent and credit flow went up by 28.1 per cent. Out of aggregate deposit, 67.7 per cent deposit comprises of Bagmati Province. Likewise 56.4 per cent of the aggregate credit flow also comprised of Bagmati Province. However, Karnali Province comprises lowest deposit and credit with slight increase of 1.2 per cent in the review period.

In the infrastructure development, hydro and aviation made a slight progress. The report showed that hydelprojects of the aggregate capacity of 1458 MW were ready to produce electricity. The number of International Air planes reached 27 and the number of airport remained 35 in the FY 2020/21.