Consumption occupies 93 per cent of Nepal’s GDP

Kathmandu, June 8: The share of total consumption in gross domestic product (GDP) of the country is high.

According to economic survey made public by the government recently, more than 93 per cent of Nepal's gross domestic product (GDP) for the current fiscal year is spent on consumption.

Total consumption, which was 93.78 per cent of the GDP in the last fiscal year, is estimated to be 93.45 per cent in the current fiscal year 2024/25.

The survey showed that 93.45 per cent, or Rs. 5,707 billion, of the GDP of Rs. 6,107 billion rupees is spent on the final consumption.

According to the survey, the size of Nepal's economy is estimated to reach Rs. 6,107 billion in the current fiscal year 2024/25. In the last fiscal year 2023/24, the size of the economy is revised and estimated to be Rs. 5,709 billion.

Nepal's economic growth is estimated to be 4.61 per cent due to the growth in the sectors of agriculture, energy, transport and storage. The economic growth rate was 3.67 per cent last year.

The share of total consumption in gross domestic product has averaged 91.5 per cent annually over the past decade.

Total consumption, which increased by 7.5 per cent in the last fiscal year, is estimated to increase by 6.6 per cent in the current fiscal year.

The share of government sector consumption in GDP is in single digits, according to the survey.

In the current fiscal year, the proportion of government sector and private sector consumption in the gross domestic product is estimated to be 7.25 per cent and 84.27 per cent, respectively, and the share of non-profit organisations' consumption is estimated to be 1.92 per cent.

In the previous fiscal year, proportion of government sector, private sector and non-profit organisations' consumption in the gross domestic product were 7.44 per cent, 84.45 per cent, and 1.89 percent, respectively. 

In the last decade, such proportions were 8.0 per cent, 81.8 per cent, and 1.7 per cent, respectively.

According to the survey, the share of government sector consumption in total consumption is on a decreasing trend, while the share of private sector and non-profit organizations' consumption is on an increasing trend. 

In the current fiscal year, the proportion of government sector, private sector, and non-profit organisations' consumption is estimated to be 7.76 per cent, 90.18 per cent, and 2.06 per cent, respectively. 

In the previous fiscal year, proportion of government sector, private sector, and non-profit organisations' consumption were 7.93 per cent, 90.06 per cent, and 2.01 per cent, respectively. 

The average proportion of government sector, private sector, and non-profit organisations' consumption for the past ten years are 8.73 per cent, 89.43 per cent, and 1.8 per cent, respectively.

The survey showed that the share of food consumption in total private consumption is high.

In the current fiscal year, the share of food, non-food and services in total private consumption is estimated to be 49.30 per cent, 18.19 per cent and 32.51 per cent respectively. 

In the previous fiscal year, share of food, non-food and services in total private consumption were 48.54 per cent, 18.37 per cent and 33.09 per cent respectively.

Meanwhile, gross national saving has been increasing in recent years. While gross national saving was 6.2 per cent of the GDP in the last fiscal year, it is estimated to increase marginally to 6.6 per cent in the current fiscal year. 

In the last decade, the annual average of gross national savings in the GDP has been 8.5 per cent.

The share of gross national savings in the GDP has increased in the last three fiscal years. In the current fiscal year, gross national savings is estimated to be 36.24 per cent of the GDP. 

Last fiscal year, such ratio was 35.39 per cent. In the last decade, the annual average of gross national savings in the GDP has been 35.80 per cent.