Nepal's economic growth could rise to 4 percent in 2008 from the current 2.5 percent if the peace process moves ahead as expected, according to a UN economic survey launched Thursday in Kathmandu.
The survey, conducted by United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), said that an expected upturn in the economy in 2007 failed to materialize due largely to political problem in some areas of the country and adverse weather conditions that led to a poor agricultural performance which undermined efforts to reduce poverty in the country, especially in rural areas.
"Rising food prices, especially affecting lower income groups, and weak agricultural productivity combined with fuel and power shortages, leading to below average industrial growth, are the key concerns facing Nepal's immediate outlook," ESCAP said in the survey, adding that increased agricultural productivity is necessary to reduce poverty and income inequality.
The survey further said that Nepal's traditional industrial export, such as ready-made garments, were weakened by supply side constraints and increased competition from other garment-exporters entering the World Trade Organization.
But, according to ESCAP, positive indications were evident in on-going remittances which continued to sustain the economy by cushioning economic shocks.
"Although high oil prices adversely affect the Nepalese economy, they also lead to increased demand for workers in the oil-exporting countries of Western Asia, where many Nepalese migrate to," ESCAP said.
Speaking at the launching ceremony, Robert Piper, UN Resident Coordinator said that beyond remittances, Nepal has not enjoyed the kind of economic growth experienced by its neighbors during this dynamic development decade.
"Development in this country has been overshadowed by a conflict which has taken a heavy toll in lives, in investment, in infrastructure, in growth. Only with peace can Nepal's real development potential be unleashed. And only with development can Nepal's peace be a lasting one," Piper said.
Source:Xinhua
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