Country Economic Review: Nepal
Asian Development Bank | June 2003
The economic performance of Nepal was exceptionally weak in FY2002, registering a negative growth rate for the first time in the past two decades. Real gross domestic product growth fell precipitously to -0.5% in 2002—the lowest in South Asia—from 4.6% in 2001. A series of domestic and external shocks, especially the continued escalation of the insurgency, irregular monsoon, and weak external demand, have exacerbated the economic downturn that began in mid–2001. Agricultural output slipped to 2.2% in 2002 due to the irregular monsoon, after strong performance in 2000 and 2001. Industry and tourism were hit hard by the insurgency and weak external demand. After exceptional expansion of 8.7% in 2000, and for the first time since 1990, industrial growth was lower than agricultural growth, plummeting to -3.3% in 2002 after expanding to 2.7% in 2001, largely due to –10% growth in manufacturing, the sharpest contraction in two decades (Appendix 2, Table A2.1). Service sector growth was kept down by domestic security problems and declined by 1.4% in 2002 after expanding by 5.3% in 2001. Tourist arrivals have declined by 28%, resulting in an estimated 34% reduction in receipts from tourism.
CitationAsian Development Bank. 2003. Country Economic Review: Nepal. © Asian Development Bank. http://hdl.handle.net/11540/6339.
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