It's even worse than we thought. The Central Bureau of Statistics says GDP growth this year will be 0.84 percent-the lowest ever in the past 20 years. The main culprit is political instability which has hit investment, trade, and tourism. Bad weather also affected harvests, which would have otherwise cushioned the impact. Growth in agricultural GDP will be only 1.72 percent, about a third of last year.
Manufacturing is looking even worse, taking a near six percent plunge. Carpet and garment exports are down by a quarter. As if all this weren't bad enough, revenue is down. "At best we may collect Rs 50 billion," a Finance Ministry source told us. This is far short of projections of Rs 60 billion, and will barely cover recurrent expenses. The only silver lining seems to be overseas remittances.

With parliament dissolved, the budget will be passed by ordinance, and donors are worried government may overspend. Prime Minister Sher Bahadur Deuba told donors this week he was counting on them. He is asking for $100 million as budgetary support, and another $150 million for rehabilitation reconstruction.