--By TC Correspondent
The country will not regain strength in economic growth in 2014 despite a successful second Constituent Assembly (CA) election.
The World Bank has estimated Nepal’s economic growth to be not more than 3.8 per cent in 2014, a marginal improvement compared to the 3.6 per cent growth rate in 2013.
The data of Global Economic Prospectus 2014 report released by the World Bank clearly showed that the country has still a long way to go to achieve the growth target set by the government. According to the latest monetary policy, the government aims to achieve 5.5 per cent economic growth in 2014.
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The growth forecast by the bank is a blow to the government’s plan of achieving 7 per cent economic growth. The forecast also showed that the government’s plan of improving its status as the developing country from existing Least Developed Country (LDC) is an ambitious plan which is hard to achieve any time soon as the World Bank has projected 4.4 per cent growth rate for 2015 and 5.2 for 2016.
Experts, however, say that the country can do better than World Bank’s forecast if it aims at mobilizing more investment from the private sector.
World Bank’s projection is based on the data of October 2013, said former finance secretary Rameshore Khanal. “The economic situation was better in December as the agriculture sector witnessed improvement including the production of crops.”
We can say the World Bank’s data has underestimated the country’s economic situation to some extent, he claimed. “The country can achieve around 4.5 per cent economic growth in 2014.”
We must focus on our major sectors such as agriculture, tourism, water resource if we are to attain speedy economic growth, said economist Dr Chiranjibi Nepal.
Slower government expenditure – especially capital expenditure – despite timely monsoon that might boost agriculture growth, is still a big challenge for the country, he opined. “It is expected that the new government will bring policy to accelerate capital expenditure.”
Taking the private sector into confidence is the only way out to propel economic growth while policy stability and endorsement of essential laws is a must to boost the private sector’s confidence, according to Khanal.
The banking sector is still reluctant to invest in hydro projects and other big projects, he said. The government should identify the problems of banks and foster an environment where all banks can invest in big projects which will help boost economic activities.
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