Short Description of NEPAL Economy...

2. INTRODUCTION:
 Economic development in Nepal has been complicated and affected by the
constant change in political scenarios which has ranged from monarchy to being
ruled by the Communist party in 2019. An isolated, agrarian society until the
mid-20th century, Nepal entered the modern era in 1951 without schools,
hospitals, roads, telecommunications, electric power, industry, or civil service.
The country has, however, made progress toward sustainable economic growth
since the 1950s and opened the country to economic liberalization leading to
economic growth and improvement in living standards than compared to the
past.

3. KEY ECONOMIC & DEMOGRAPHIC STATISTICS:
GDP - per capita: purchasing power parity (current international $) - $2700 (2017 est.)
GDP - composition by sector:
Agriculture: 17%
Industry: 13.5%
Services: 60.5% (2017 est.)
Tourism: 9%
Population below poverty line: 21.6% (2017/2018)
Household income or consumption by percentage share:
lowest 10%: 3.2%
highest 10%: 29.8% (1995–96)
Inflation rate (consumer prices): 4.5% (2017)
Labour force: 4 million (2016 est.)
Labor force (by occupation) : agriculture 19%, services 69%, industry 12% (2014 est.)

4. In this financial year our government targets
to achieve:
All the basic necessities like:
• Affordable housing to all
• Electricity to all (Rural + Urban)
• Provide Tap water and better Sanitation
• Develop infrastructure for MSME
• Digitalization of financial sector
• Towards De-carbonization
• Promoting major economic sources
(specially Tourism).
Estimated cost $ 2 billion (Hypothetical)

5. Nepal has used a series of five-year plans in an
attempt to make progress in economic
development. Agriculture remains Nepal's principal
economic activity, employing about 65% of the
population and providing 31.7% of GDP. GDP is
heavily dependent on remittances (9.1%) of foreign
workers. Progress has been made in exploiting
Nepal's natural
resources, tourism and hydroelectricity.
Country heavily relies on personal remittances. In
2016-17 getting 80 % of total receipts form it
followed by Official Development Assistance
(17%) and Private Grants and FDI are very
insignificant in case of Nepal merely contributing
1% and 2% respectively.
Person
al
Remitt
ances
80%
FDI
2%Official
Develo
pment
Assista
nce
17%
Private
Grants
1%

6. Tax Revenue (as % of GDP)
Gross fixed capital formation
(annual % growth)
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2010 2011 2012 2013 2014 2015 2016 2017
TAX to GDP Ratio
TAX to GDP Ratio

7. table 1: Remittances for Nepal from 2010-18 (in USD Billion)
Year Remittances (Billion USD$)
2010 3.464
2011 4.217
2012 4.793
2013 5.589
2014 5.889
2015 6.73
2016 6.612
2017 6.928
2018 8.064
table 2: Tax to GDP Ratio of Nepal from 2010 to 2017
Year TAX to GDP Ratio
2010 13.39%
2011 13.26%
2012 13.86%
2013 15.29%
2014 15.90%
2015 16.71%
2016 18.68%
2017 20.95%

8. Better leveraging remittances, which represent the bulk of
external financing in the country, will be key to finance
sustainable development. Focusing on boosting to key
economics sector like Agriculture, Service Sector and
promoting to the potential sectors like Tourism, Energy, etc.
Nepal has great source of Green power generation which wll
lead them to fulfill their sustainable energy needs.
New money transfer technologies (e.g., block chain, crypto
currencies) could help strengthen financial inclusion by
reducing the high costs of transfer lost to banking
intermediaries and currency exchanges. IDA’s work to
strengthen the financial sector and inclusiveness could
benefit from integrating the use of financial technology in
their implementation of projects.