Koshi Province economy likely to grow by 3.5% in 2023/24

Kathmandu, Jan. 14:The economic growth of Koshi Province for the fiscal year 2023/24 is estimated to be 3.51 per cent. 

The revised estimate for the economic growth of the previous fiscal year 2022/23 was 2.13 per cent.

The National Statistics Office estimates that the share of Koshi Province in the national GDP in the fiscal year 2023/24 will be 15.84 per cent. 

In the previous fiscal year, the share of this province was 15.88 per cent.

In the fiscal year 2023/24, the contribution of the agriculture sector to the GDP of Koshi Province is estimated to be 32.80 per cent, the industrial sector 16.32 per cent and the service sector 50.88 per cent.

Increased agricultural production

According to a Provincial Economic Activities Study report for the fiscal year 2023/24 made public by the Nepal Rastra Bank, the total area covered by agricultural crops in Koshi Province has decreased by 1.55 per cent in the fiscal year 2023/24 compared to the fiscal year 2022/23.

During the review period, the area covered by crops, including rice, maize, millet, potato, soybean, orange and turmeric has decreased, resulting in a decrease in the total area covered by agricultural crops.

Of the total area covered by agricultural produce in Koshi Province, the area covered by food and cash crops is 87.92 per cent, vegetable crops 5.11 per cent, and other crops 6.97 per cent, said the report. 

Of the total area covered by agricultural produce, the area covered by rice, maize, wheat and millet crops accounts for 71.64 per cent.

However, the overall production of agricultural crops increased by 1.13 per cent in the province in the last fiscal year 2023/24.

In particular, under food crops, rice production increased by 7.45 per cent and millet by 0.86 per cent, resulting an increase in the production of overall agricultural crops.

However, the production of fruit decreased by 0.94 per cent and spice crops by 8.03 per cent during the review period.

In the fiscal year 2023/24, the total irrigated area in Koshi Province has expanded by 1.52 per cent.

In the fiscal year 2023/24, irrigation facilities reached at 37.3 per cent of the total cultivable area of this province. Area covered by irrigation facilities was 36.74 per cent in the previous fiscal year. 

Similarly, the production of milk in Koshi Province increased by 19.93 per cent, meat by 2.30 per cent and fish by 1.21 per cent, while egg production decreased by 1.73 per cent and poultry by 6.43 per cent in the fiscal year 2023/24.

According to NRB, credit flowed to the agricultural sector of Koshi Province from banks and financial institutions has decreased by 2.10 per cent to Rs. 59.90 billion by mid-July 2024 as compared to mid-July 2023.

The share of credit flowed to the agricultural sector out of the total credit as of mid-July 2024 is 10.12 per cent.

Average capacity of industries at 52.7%

The average capacity utilisation of the industries included in the sample selection of this province in the fiscal year 2023/24 stood at 52.7 per cent.

In the fiscal year 222/23, the average capacity utilisation of these industries was 51.1 per cent.

According to the product, the capacity utilisation of the tire and tube manufacturing industry was the highest at 91.3 per cent during the review year, while the capacity utilisation of the vegetable ghee manufacturing industry was the lowest at 4.4 per cent.

Among the industries covered in this study in the fiscal year 2023/24, the production of garments increased the most by 202.1 per cent, while the production of household metal goods decreased the most by 45.7 per cent.

As of mid-July 2024, there were a total of 1,837 branches, including 754 commercial banks, 195 development banks, 36 finance companies, and 852 microfinance financial institutions in the province.

The total deposit mobilisation of banks and financial institutions located in Koshi Province increased by 13.38 per cent to Rs. 477 billion and the loans disbursed increased by 3.81 per cent to Rs. 578 billion by mid-July 2024 as compared to mid-July 2023.

As of mid-July 2024, the share of current deposits in the total deposits mobilised by BFIs in this province is at 6.53 per cent, savings deposits at 44.27 per cent, fixed deposits at 43.19 per cent and other deposits at.01 per cent.

Electricity generation capacity reaches 653 MW

The total generation capacity of the power projects operating in Koshi Province is 653.55 MW. 

During the review period, electricity generation capacity of seven projects, including six hydropower and one solar, in Koshi Province is 168.5 MW.

Among the hydropower projects operating in Koshi Province, the electricity generation capacity of hydropower projects operating in Solukhumbu district has the highest capacity of 245.4 MW. 

Among the districts of this province, there are 16 hydropower projects in Ilam, eight in Sankhuwasabha, seven in Solukhumbu, five each in Panchthar and Taplejung, three each in Khotang and Bhojpur, and one each in Terhathum and Okhaldhunga.

Similarly, there are one each solar power projects in Jhapa and Morang.