KATHMANDU: Nepal Rastra Bank (NRB) has conceded that the targeted 6 percent economic growth for this year cannot be achieved even though the government is yet to come out with its revised economic growth forecast.
The central bank made a downward revision of the growth forecast to 5 percent citing poor performance in the farm sector which accounts for one-third of the national economy. The revised estimate is lower than the 5.2 percent growth rate attained in the last fiscal year.
Unveiling a mid-term review of the monetary policy for this fiscal year, NRB Governor Yubaraj Khatiwada said that the agriculture sector had grown a mere 2 percent.
“In order to meet the targeted growth, the non-farm sector will have to grow at a rate of more than 8 percent, which is impossible at best under the current circumstances,” he added. He said that the revised estimate had been made based on discussions with the government.
The Ministry of Agricultural Development has already revealed that key cereal production has dropped this fiscal year with paddy output down 5.1 percent to 4.78 million tonnes, and maize, the second most important staple crop, down 6 percent to 2.14 million tonnes.
According to the ministry, paddy production shrank largely due to a late monsoon and untimely rainfall followed by other reasons like expanding urban areas, land plotting for residential development and natural disasters.
