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Nepal Economy 1996

    • Overview:
      Nepal is among the poorest and least developed countries in the world. Agriculture is the mainstay of the economy, providing a livelihood for over 90% of the population and accounting for half of GDP. Industrial activity is limited, mainly involving the processing of agricultural produce (jute, sugarcane, tobacco, and grain). Production of textiles and carpets has expanded recently and accounted for 85% of foreign exchange earnings in FY93/94. Apart from agricultural land and forests, exploitable natural resources are mica, hydropower, and tourism. Agricultural production in the late 1980s grew by about 5%, as compared with annual population growth of 2.6%. More than 40% of the population is undernourished. Since May 1991, the government has been encouraging trade and foreign investment, e.g., by eliminating business licenses and registration requirements in order to simplify domestic and foreign investment. The government also has been cutting public expenditures by reducing subsidies, privatizing state industries, and laying off civil servants. Prospects for foreign trade and investment in the 1990s remain poor, however, because of the small size of the economy, its technological backwardness, its remoteness, and susceptibility to natural disaster. The international community provides funding for 70% of Nepal's developmental budget and for 30% of total budgetary expenditures. The government, realizing that attempts to reverse three years of liberalization would jeopardize this vital support, almost certainly will move ahead with its reform program in 1995-96.

    • National product:
      GDP - purchasing power parity - $22.4 billion (1994 est.)

    • National product real growth rate:
      5% (1994 est.)

    • National product per capita:
      $1,060 (1994 est.)

    • Inflation rate (consumer prices):
      9.6% (June 1994)

    • Unemployment rate:
      NA%; note - there is substantial underemployment (1994)

    • Budget:

        $455 million

        $854 million, including capital expenditures of $427 million (FY93/94 est.)

    • Exports:
      $593 million (f.o.b., 1993) but does not include unrecorded border trade with India

        carpets, clothing, leather goods, jute goods, grain

        India, US, Germany, UK

    • Imports:
      $899 million (c.i.f., 1993)

        petroleum products 20%, fertilizer 11%, machinery 10%

        India, Singapore, Japan, Germany

    • External debt:
      $2 billion (1993 est.)

    • Industrial production:

    • Electricity:

        280,000 kW

        920 million kWh

        consumption per capita:
        41 kWh (1993)

    • Industries:
      small rice, jute, sugar, and oilseed mills; cigarette, textile, carpet, cement, and brick production; tourism

    • Agriculture:
      rice, corn, wheat, sugarcane, root crops, milk, buffalo meat; not self-sufficient in food, particularly in drought years

    • Illicit drugs:
      illicit producer of cannabis for the domestic and international drug markets; transit point for heroin from Southeast Asia to the West

    • Economic aid:

        US commitments, including Ex-Im (FY70-89), $304 million; Western (non-US) countries, ODA and OOF bilateral commitments (1980-89), $2.23 billion; OPEC bilateral aid (1979-89), $30 million; Communist countries (1970-89), $286 million

    • Currency:
      1 Nepalese rupee (NR) = 100 paisa

    • Exchange rates:
      Nepalese rupees (NRs) per US$1 - 49.884 (January 1995), 49.398 (1994), 48.607 (1993), 42.742 (1992), 37.255 (1991), 29.370 (1990)

    • Fiscal year:
      16 July - 15 July

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