Economic Growth Rate in Third Quarter at 2.2 Percent
July 18, 2024 | Investopaper
In the third quarter of the last fiscal year 2080–81, the economic growth rate of Nepal stood at only 2.2 percent at basic prices. According to the National Statistics Office, the overall growth rate declined due to negative growth in four key sectors excluding agriculture. Specifically, trade, manufacturing industries, construction, and mining sectors experienced negative growth during this quarter. Other sectors saw positive growth.
The positive contributors to the economy in this quarter were primarily the increased production of wheat, potatoes, cash crops, and fruits. Additionally, the rise in tourist arrivals and the corresponding increase in value addition in the hotel sector supported the growth rate, as noted by the office.
Currently, the agricultural sector contributes 24 percent to the economy. Historically, low economic growth was often attributed to the agricultural sector. This time, however, the agricultural sector saw above-average growth. Despite this, the negative growth in many other sectors resulted in an overall low growth rate.
Problems were notably present in the trade and construction sectors. Trade, which is the second-largest sector after agriculture and accounts for approximately 14 percent of the economy, saw a negative growth rate of 2.7 percent. The construction sector, contributing 5 percent to the economy, declined by 11 percent. The manufacturing industry and mining sector also experienced negative growth of 2 percent and 4.8 percent, respectively.
However, electricity and gas industry saw the highest growth rate of 37.1 percent, followed by accommodation and food services at 19.1 percent, and transportation and storage at 15 percent. Arts and entertainment sector grew by 8.3 percent, while financial and insurance services grew by 6.1 percent, driven by increases in deposits and loans.
