Performance of Nepalese Economy
Performance of Nepalese Economy
Performance of Nepalese Economy
Any country’s economic situation, whether it is moving towards its up heals or a downturn, is
measured by its Gross Domestic Product (GDP). GDP is all economic activities made by both
domestic as well as foreign factors of production within a country. Measuring just a GDP is
insufficient for a country to know where it is heading regarding its economic situation. So,
country’s economic performance, which is indicated by real GDP and its growth rate, is must for
policy maker and planner to implement its strategic plan in long run and to achieve its targeted
objectives in short run. Higher GDP growth rate indicates well performance of economic
activities. In the context of Nepalese economy as we can see in below fig … its real GDP is
increasing during study period (1990-2016). However, growth rate in real GDP is fluctuating
over its time period means its growth rate is volatile. The average growth rate during study
period is 4.42 % but this doesn’t indicate its growth is oscillating near to its average due to the
fact that the country during its study period has experienced many external shocks. Its maximum
growth rate is 9.49 % in fiscal year 1996 and minimum growth rate is 0.12 in 2002. The reason
for maximum growth rate in 1996 is due to impact of privatization policy adopted by Nepal
(1992). Minimum growth rate in 2001 is due to political instability due to Maoist people’s war.
A growth rate is 6.1 % in 2009 which is positive impact of peace process between government of
Nepal, Maoist and constitutional assembly. And growth rate is 0.4% in 2016 is due to disastrous
earthquake in 15th April 2015 and trade blockade by India
Table 4.1: Trend of growth rate of GDP of Nepal from 1990 to 2016
Figure 4.1: Trend of Growth Rate of GDP of Nepal from 1990 to 2016
Remittances under this topic are worker’s remittances. Increase in remittances means most of the
workers works outside the country. After liberalization, globalization and privatization policies
adopted by Nepal, most of the skilled and unskilled workers work outside country. The flow of
remittances increasing at slow rate from 1990 to 2005 and increasing rapid rate from 2006 to
2016. However, growth rate of remittances are ups and down during the study period. Maximum
growth rate is 314% in 1999. The minimum growth rate is negative 15.43 % in 1995. Average
growth rate is 31.69 %.
300
250
200
150
100
50
0
1992
1994
1996
1993
1995
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-50
Budget is estimated revenue and expenditure of a country during a fiscal year period of time.
Nature of budget in developing countries are deficit i..e expenditure is made more than
government income. Such resource gap is fulfilled by foreign aid. The flow of foreign aid is
continuously increasing during study period. The growth rate of aid are ups and down. Maximum
growth rate is 33.7 % in 2012 and minimum is -23.47 % in 2003. Average growth rate during
study period is 10.10%.
30
20
10
0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-10
-20
-30
4735273.59999 660020.100000
Sum 13230816.5 9999 0001
689663877650. 1316387591677 7569412102.58
Sum Sq. Dev. 2051 .53 6667
Observations 27 27 27