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Kathmandu,Thursday April 27, 2000 Baishakh 15, 2057.
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Inflation to drop: ADB
By a Post Reporter
KATHMANDU, April 26 - The
inflation rate for Nepal would significantly decline in the year 2000 to 5 percent, the
Asian Development Bank (ADB) predicted today.
The figure would be a drop from
the previous year that recorded 12.7 percent inflation.
"Inflation is expected to
decline significantly despite the increase in kerosene, diesel and electricity prices in
the second quarter of the current fiscal year," said ADB Resident Representative
Richard Vokes presenting the ADB Outlook 2000.
Quoting the ADB Outlook 2000
that was released today, ADB says fuelled by a recovery of the agriculture sector and
strong performance in other sectors including the carpet and garment industries,
Nepal’s economic should achieve growth rate of 5-to-6 percent in 2000.
The report says that prospects
for 2000 are for significantly higher growth. In agriculture, a favourable monsoon and
wider use of fertilizer is leading a strong recovery in production, specially in rice and
vegetables. Early indicators from carpet and garment industries also suggest strong
performance while tourism is also expected to perform quite well. As a result, GDP is
expected to grow by between 5 to 6 percent.
The report said that the actual
revenue performance will critically depend on the effective implementation of the Value
Added Tax and development expenditures in 2000 budget are projected to grow by 33 percent
and will be mainly financed by foreign grants, which are projected to be grow by 47
percent.
"The new government can, as
promised, push forward with implementation of a second round of economic reforms then the
outlook for 2001 is for continued growth," Vokes said. "Apart from the need to
continue and sustain reforms in the agriculture sector, civil service reform and financial
sector reform need to be at the core of the government’s broad-based reform
agenda."
The report also emphasises the
need for the government to pursue the broad-based reform agenda, with financial sector
reform and civil service reform as the core to achieve the levels of sustained growth
necessary to lift the population out of poverty. The government needs to develop more
focused strategies for reducing poverty.
ADB says the government’s
reforms agenda for poverty reduction set out in the government’s country memorandum
presented at the recent Nepal Development Forum meet in Paris and the government’s
priority reforms actions are very encouraging steps in the right direction.
The effective implementation of
the reforms agenda will remain a major challenge not only to the government but also to
the intended beneficiaries and wider civil society as well as Nepal’s developments
partners like ADB.
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