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Nepalese Economy and Resources

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  • 1. By : Bharat Poudel bharat@globalcollege.edu.np
  • 2.  Nepal is a landlocked country.  Border  China in the north  India in the south, east and west Size  Area: 147,181 sq. km.  Length: 885 km (east to west)  Width:, average width 193 km. north to south.  Administrative and Physical Division  Nepal is divided administratively into 5 development region, 14 zones, and 75 districts.
  • 3.  Nepal is a least developed country, according to IMF, those country are least developed whose Per Capita Income (PCI) is less than $905.  There are 48 least developed countries in the world.  According to World Economic Outlook, 2013, Nepal’s per capita income is only $646 and economic growth rate is 4.6 percent.
  • 4.  The economic growth rate of the country, a major indicator of economic development, has not been encouraging.  The economic growth rate of country that averaged 3.51 percent over a decade has registered growth of 3.6 percent in the current fiscal year.
  • 5. 2065/66 2066/67 2067/68 2068/69 2069/70* Nepal 3.9 4.3 3.9 4.5 3.6 Agricultu re 3 2 4.5 5.0 1.3 Industry -0.6 4.1 4.4 3.0 1.5 Service 6 5.8 3.4 4.5 6.0 Source: Economic Survey 2068/69
  • 6. Country Economic Growth rate Nepal 4.6 India 4 Pakistan 3.7 Bhutan 9.7 Afghanistan 10.2 Bangladesh 6.1 Sri-Lanka 6.4 Source: world Economic Outlook, 2013
  • 7.  According to NLSS 2010/11, a person is said to be poor if his/her per-capita total annual consumption is below Rs. 19,261.  Using this income based approach, 25.16 percent of the total population lives below the poverty line in Nepal.  The poverty rate is much lower in urban areas (15.46%) than in rural areas (27.43%).
  • 8. NLSS I ( 2052/53) NLSS II (2060/61) NLSS III ( 2066/67) Nepal 41.76 30.85 25.16 Rural Sector 21.55 9.55 15.46 Urban Sector 43.27 34.62 27.43
  • 9. 0 5 10 15 20 25 30 35 40 45 50 NLSS I NLSS II NLSS III Nepal Rural Sector Urban Sector
  • 10.  It is a backbone of Nepalese economy.  73.9 percent active labor force engaged ( NLFS 2008).  In the fiscal year 2068/ 69 the contribution of agriculture sector in total GDP is 35.36 percent.  Low productivity  Depends on neighbour countries for agriculture product.
  • 11.  The size of population of Nepal is 2, 64, 96,504, of this the size of male and female is 1,28,49,041 (48.50%) and 1,36,45,463 (51.50%) respectively.  Total number of household is found to be 54,27,302.  Annual average population growth rate is 1.35 percent.  Population growth have both impact (Negative and Positive) in economic growth.
  • 12.  Nepal bear the huge trade deficit.  About 70 percent foreign trade belong with India ( Export and Import)  Composition of Export trade in percentage Direction 2006/07 2007/08 2008/09 2009/10 2010/11 India 70.27 65.5 60.9 64.4 67.4 Other countries 29.73 34.9 39.1 35.6 32.60 Source: Economic Survey 2011/12
  • 13. Direction 2006/07 2007/08 2008/09 2009/10 2010/11 India 59.51 64.15 56.26 54.7 66.12 Other Countries 40.49 35.85 43.74 45.3 33.88 Source: Economic Survey 2011/12
  • 14.  Inflation means a substantial and rapid increase in the general price level, which causes a decline in the purchasing power of money or value of money.  It most important macro economic factor of an economy.
  • 15. Fiscal Year Inflation Rate 2063/64 5.9 2064/65 6.7 2065/66 12.6 2066/67 9.6 2067/68 9.6 2068/69 8.3 Source: Nepal Rastra bank
  • 16. 5.9 6.7 12.6 9.6 9.6 8.3 2063/64 2064/65 2065/66 2066/67 2067/68 2068/69 Inflation Rate Inflation Rate
  • 17.  Hydro Electricity :There are more than 6000 rivers in the country. Hence there are huge hydro-power potentialities.  Theoretically and technically, Nepal's hydro-power potentiality is estimated to be 83,000 MW and 42,000 MW, respectively.  Total , installed capacity had reached 705 MW by the end of fiscal year 2068/69 , which is merely 0.84 percent of total potential and 1.68 percent of technical potential ( Three Year Plan Document, 2070/71- 072/73).
  • 18.  Tourism Nepal has enormous potentials to make a regional hub with global destination to attract tourists from all over the world. Biodiversity The rich eco-system and a variety of species have tremendous economic potential.
  • 19.  Export Potential: In 2010 Nepal Trade Integration Strategy (NTIS) indentified nineteen key commodities and services that have export potential.  Human Resources: Increasing remittances through foreign employment have been instrumental in poverty reduction.  Agriculture especially high value crops: There exists enormous potential for agriculture development especially high value crops through promoting agribusiness and commercialization.

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