Economy bounces back, employment flounders

Nepal posted economic growth of 4.7 percent in producers' price -- highest in seven years -- in 2007/08, but failed to check rise in unemployment, which went up contrary to general expectations due to a sharp shrinkage in the manufacturing sector. Manufacturing sector, the mainstay of semi and unskilled urban employment, grew at a squeezed rate of 0.18 percent during the year, whereas it had grown by 2.55 percent last year. "Lack of fresh recruitment in the public sector also contributed to the rise in unemployment," says the Economic Survey for 2008/09.

The annual report of the Ministry of Finance released Monday further shows that youth unemployment in the country stood high at 15 percent and the income gap between people also widened during the year.

Situation of health services improved during the year. According to the Survey, the number of hospitals grew to 94 from 87 last year. Twenty-three new health posts were also built to provide basic health services to people at the village development committee level.

However, the number of sub health posts and primary health centers operating at the village and community level went down to 3,104 and 201 from 3,129 and 205 respectively.

The country saw a sound rise in the number of educational institutions. The number of primary and secondary schools went up by 1,319 and 565 respectively, but enrolment at both these levels dropped compared to the previous year.

According to the Survey, enrolment in primary education dropped to 4.42 million from 4.51 million and in secondary education it slid by about one percent, compared to the enrolment recorded last year.

The government added 373 kilometers to the national road network. That increased the length of the national road network to 17,982 kms in the first eight months of the current fiscal year. Likewise, 42,393 new telephone lines were distributed during the period.

Good monsoon, recovery of tourism, boom in construction and rise in consumption - attributed to the peace process and growing remittance flow - increased the size of the Nepali economy to over Rs 820 billion in 2007/08.

During the year, agriculture grew by 5.65 percent, contrary to the low growth of 0.94 percent recorded last year. Non agriculture sector also expanded by 5.57 percent - better than the 4.10 percent of last year.

This has raised per capita income of Nepalis to $470. But a sharp rise in prices of goods and services gave a hard time to the general consumer.

The Survey says annual average inflation for the year remained at 7.4 percent. Rise in commodities and service prices is attributed to domestic adjustment of petroleum products and sharp rise in food prices in the international market.
Source: eKantipur