By Modnath Dhakal
Kathmandu, Mar. 5: The Central Bureau of Statistics (CBS) has rebased the national accounts statistics from 2000/01 to 2010/11 which has resulted in the growth of the Gross Domestic Product (GDP) by 5 per cent.
With the calculation based on the new base year, the size of Nepal’s economy has reached Rs. 3943.7 billion in 2020. The size was estimated at Rs. 3767 billion according to the old base year.
The adjustment had increased the GDP by 12 per cent in 2018/19 to reach Rs. 3859 billion from Rs. 3458.8 billion as per calculations based on old base year. The size of country’s economy was of Rs. 1559.2 billion two decades ago.
However, the rebasing of the statistics concluded that the economic growth in Fiscal Year 2019/20 would be negative by 1.99 per cent against the earlier government’s estimates of 2.27 per cent. The coronavirus pandemic and the ensuing lockdown had closed all the businesses and industries except a few essential sectors for about four months while service sectors like tourism and education have remained shut for about 10 months.
It was an economic free fall after 2015/16 when the economy was devastated by the earthquake and months-long Indian blockade. That year, the economic growth was nil while during the Maoist armed rebellion, Nepal had recorded negative growth.
On a positive note, the readjustment showed that the economic growth in the post-quake year 2016/17 was 8.59 per cent. It was 7.74 per cent as per the old base year calculation.
“This means that if the situation is favourable, the country can achieve double-digit economic growth. Calculation methodology has not made this significant change but structural changes,” said Dr. Hem Raj Regmi, Deputy Director General of the CBS.
PCI GDP goes up
The rebasing of the national accounts statistics has also shown that the per capita income (PCI) GDP has gone up to US$1134. It was estimated at $1085 as per old base year.
However, while the PCI had gone up in 2020 against the previous year as per old base year calculations, it has declined according to the new calculations. It was $1159 in 2019. The PCI GDP was $814 in 2010/11 and had witnessed a continuous growth ever since.
The composition of agriculture, industry and service in the economy a decade ago was calculated as 37.6 per cent, 14.4 per cent and 48 per cent respectively according to the old base year but it is readjusted to 34 per cent, 13.9 per cent and 52.2 per cent after rebasing.
Economic growth -4.6% in first quarter
Economic growth in the first quarter of the current fiscal year is estimated at -4.6 per cent. Likewise, according to the CBS, the economy contracted by 15.4 per cent in the final quarter of the last fiscal compared to the previous quarter.
“COVID-19 has had adverse impact on accommodation and food, and transportation and storage sectors the most. These sectors are expected to contract by 25.7 and 13.4 per cent,” read a report of the CBS published on Thursday.
However, electricity and gas sector was unaffected by the pandemic even during the lockdown. As per the revised estimates, this sector will grow by 25.6 per cent. Public administration and human health are other sectors that were less affected by the pandemic.
Likewise, in the first quarter of the current fiscal, accommodation and food service sector saw a negative growth of 70.9 per cent and manufacturing -10.2 per cent. Other areas having negative growth are transportation and storage, wholesale and retail trade, and mining and quarrying.
Dr. Regmi said that rebasing of the national accounts series is the process of replacing an old base year with a new and more recent base year for computing constant price estimates. This can be taken as an opportunity to address the limitation regarding methodology, definition and data sources.
The Rising Nepal