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Nepal Economy

Nepal Economy

Nepal is among the poorest and least developed countries in the world with more than half of its population living below the poverty line. Agriculture is the mainstay of the economy providing a livelihood for over 80% of the population and accounting for 40% of GDP. Industrial activity mainly involves the processing of agricultural produce including jute sugarcane tobacco and grain. Production of textiles and carpets has expanded recently and accounted for about 80% of foreign exchange earnings in the past two years. Apart from agricultural land and forests exploitable natural resources are mica hydropower and tourism. Agricultural production is growing by about 5% on average as compared with annual population growth of 2.5%. Since May 1991 the government has been moving forward with economic reforms particularly those that encourage trade and foreign investment e.g. by eliminating business licenses and registration requirements in order to simplify investment procedures.

Agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the population and accounting for about one-third of GDP. Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain. During the global recession of 2009, remittances from foreign workers abroad increased 47% to $2.8 billion while tourist arrivals only decreased 1% compared to the Nepal's place in the western imagination as a latter-day Shangri-La stems from its historical isolation, maintained until the overthrow of the Rana oligarchy (a small group of people who rule a nation) in 1951. previous year. The industrial sector employs only 3 percent of the population, while the successful cottage industries that produce carpets and garments bring in up to 80 percent of foreign exchange earnings from countries other than India.

The snowcapped mountains of Nepal Himalayas have inspired many peoples to come up to to this country for mountaineering expeditions. It has increased the capacity of GDP and inflation after the arrival of Democracy though the presently disturbed political situation affects its economic condition.The government has been moving forward with economic reforms that encourage trade and foreign investment.   Considerable scope for accelerating economic growth by exploiting its potential in hydropower and tourism. Foodstuffs and live animals provide about 30% of Nepal's export earnings. The manufacturing sector is very small and concentrated in light industries.

A huge number of Nepali workers have been going abroad to work in the absence of fruitful local employment opportunities. Migration is nothing new to Nepal, and the total stock of Nepali nationals working overseas (excluding about one million in India) in different capacities is estimated to be about half a million (ILO-DFID 2002)

There is nothing much to talk about when it comes to Nepalese economy. The data doesn't paint a rosy picture at all. In fact the picture looks grim. Nepal is among the poorest and least developed countries in the world. In fact Nepal doesn't stand anywhere to its otherwise d Nepal's economy is irrevocably tied to India. Nepal's geographical position and the scarcity of natural resources used in the production of industrial goods meant that its economy was subject to fluctuations resulting from changes in its relationship The GDP growth rate it Nepal has averaged 4.8% per year during the past decade. This is lower than the 6% targeted in the Ninth Five Year Plan (1997-2002) but higher than the 4.5% recorded during the 1980s. In 2001, the growth rate was 4.8% but declined to 0.8% in 2002 owing to the sharp decline in exports and tourist arrivals following the global economic slowdown.with India.eveloping neighbors such as India, Pakistan and Bangladesh. Nepal's economic growth is reliant on sufficient monsoon seasons. Remittance inflows, which drive domestic demand and account for 17% of GDP, have held up fairly well in the face of global recession but may face risks, depending on recovery in Malaysia and the Gulf countries.

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