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Things aren’t getting better


The World Bank says Nepal's prospects for an economic recovery in the medium-term (generally a three-year outlook) is bleak due to everything that happened in Nepal in 2001 and of course the global recession after 11 September. The Bank said growth in fiscal 2001/02 would be about 3 percent going by IMF numbers, which don't factor in the escalation of Maoist violence from the end of November, and the anti-terrorism campaign launched by the government including the deployment of the army. The government earlier revised its economic growth estimate to 2.5 percent, down from the roughly 6 percent projected in the July 2001 budget. Exports are down, as are imports. Readymade garments have been hit badly, and because they comprise about 25 percent of total exports, this will hurt every sector of the economy. Another reason for worry is the new WTO trading regime, which comes into effect in 2005. Quotas, a crucial factor in the growth of the garment industry, will be scrapped under the new trading rules. The prospects of a recovery in tourism in the medium-term are also uncertain: it would need extensive-and expensive-promotions to get tourists to come even after the emergency runs its course. As Finance Minister Ram Sharan Mahat says, any recovery would hinge on the ability of the country to return to normal.



LATEST ISSUE
638
(11 JAN 2013 - 17 JAN 2013)


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