Economy
Terraced
farming on the foothills of the Himalayas.
A Rs.500
banknote of The Republic of Nepal. For economical reasons,
the watermark on the right still contains a picture of
King Gyanendra, obscured by printing a rhododendron, the
national flower of Nepal.
Nepal's gross domestic
product (GDP) for 2008 was estimated at over US$12 billion
(adjusted to Nominal GDP), making it the 115th-largest
economy in the world. Agriculture accounts for about 40%
of Nepal's GDP, services comprise 41% and industry 22%.
Agriculture employs 76% of the workforce, services 18% and
manufacturing/craft-based industry 6%. Agricultural
produce — mostly grown in the Terai region
bordering India — includes tea, rice, corn,
sugarcane, root crops, milk, and water buffalo meat.
Industry mainly involves the processing of agricultural
produce, including jute, sugarcane, tobacco, and grain.
Its workforce of about 10
million suffers from a severe shortage of skilled labour.
The spectacular landscape and diverse, exotic cultures of
Nepal represent considerable potential for tourism, but
growth in this hospitality industry has been stifled by
recent political events. The rate of unemployment and
underemployment approaches half of the working-age
population. Thus many Nepali citizens move to India in
search of work; the Gulf countries and Malaysia being new
sources of work. Nepal receives US$50 million a year
through the Gurkha soldiers who serve in the Indian and
British armies and are highly esteemed for their skill and
bravery. The total remittance value is worth around US$1
billion, including money sent from the Persian Gulf and
Malaysia, who combined employ around 700,000 Nepali
citizens.
A long-standing economic
agreement underpins a close relationship with India. The
country receives foreign aid from India, Japan, the United
Kingdom, the United States, the European Union, China,
Switzerland, and Scandinavian countries. Poverty is acute;
per-capita income is less than US$470. The distribution of
wealth among the Nepalis is consistent with that in many
developed and developing countries: the highest 10% of
households control 39.1% of the national wealth and the
lowest 10% control only 2.6%.
The government's budget is
about US$1.153 billion, with expenditures of $1.789
billion (FY05/06). The Nepalese rupee has been tied to the
Indian Rupee at an exchange rate of 1.6 for many years.
Since the loosening of exchange rate controls in the early
1990s, the black market for foreign exchange has all but
disappeared. The inflation rate has dropped to 2.9% after
a period of higher inflation during the 1990s.
Nepal's exports of mainly
carpets, clothing, leather goods, jute goods and grain
total $822 million. Import commodities of mainly gold,
machinery and equipment, petroleum products and fertilizer
total US$2 bn. India (53.7%), the US (17.4%), and Germany
(7.1%) are its main export partners. Nepal's import
partners include India (47.5%), the United Arab Emirates
(11.2%), China (10.7%), Saudi Arabia (4.9%), and Singapore
(4%).
Infrastructure
Nepal remains isolated from
the world's major land, air and sea transport routes
although, within the country, aviation is in a better
state, with 48 airports, ten of them with paved runways;
flights are frequent and support a sizable traffic. The
hilly and mountainous terrain in the northern two-thirds
of the country has made the building of roads and other
infrastructure difficult and expensive. There were just
over 8,500 km (5,282 mi) of paved roads, and one
59-km railway line in the south in 2003. There is only one
reliable road route from India to the Kathmandu Valley.
The only practical seaport
of entry for goods bound for Kathmandu is Calcutta in
India. Internally, the poor state of development of the
road system (22 of 75 administrative districts lack road
links) makes volume distribution unrealistic. Besides
having landlocked, rugged geography, few tangible natural
resources and poor infrastructure, the long-running civil
war is also a factor in stunting the economic growth.
There is less than one
telephone per 19 people. Landline telephone services are
not adequate nationwide but are concentrated in cities and
district headquarters. Mobile telephony is in a reasonable
state in most parts of the country with increased
accessibility and affordability; there were around 175,000
Internet connections in 2005. After the imposition of the
"state of emergency", intermittent losses of
service-signals were reported, but uninterrupted Internet
connections have resumed after Nepal's second major
people's revolution to overthrow the King's absolute
power.
Economy - overview:
|
Nepal is among the
poorest and least developed countries in the
world, with almost one-quarter of its population
living below the poverty line. 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
previous year. Nepal has considerable scope for
exploiting its potential in hydropower, with an
estimated 42,000 MW of feasible capacity, but
political instability hampers foreign investment.
Additional challenges to Nepal's growth include
its technological backwardness, landlocked
geographic location, civil strife and labor
unrest, and its susceptibility to natural
disaster.
|
|
GDP (purchasing
power parity):
|
$33.25 billion (2009
est.)
country
comparison to the world:
102
$31.76 billion (2008
est.)
$30.16 billion (2007
est.)
note:
data
are in 2009 US dollars
|
|
GDP (official
exchange rate):
|
$12.47 billion (2009
est.)
|
|
GDP - real growth
rate:
|
4.7% (2009 est.)
country
comparison to the world:
29
5.3% (2008 est.)
3.3% (2007 est.)
|
|
GDP - per capita
(PPP):
|
$1,200 (2009 est.)
country
comparison to the world:
207
$1,100 (2008 est.)
$1,100 (2007 est.)
note:
data
are in 2009 US dollars
|
|
GDP - composition
by sector:
|
agriculture: 35%
industry: 16%
services: 49%
(FY09 est.)
|
|
Labor force:
|
18 million
country
comparison to the world:
33
note:
severe
lack of skilled labor (2009 est.)
|
|
Labor force - by
occupation:
|
agriculture: 76%
industry: 6%
services: 18%
(2004 est.)
|
|
Unemployment rate:
|
46% (2008 est.)
country
comparison to the world:
190
42% (2004 est.)
|
|
Population below
poverty line:
|
24.7% (2008)
|
|
Household income or
consumption by percentage share:
|
lowest 10%: 6%
highest 10%: 40.6%
(2008)
|
|
Distribution of
family income - Gini index:
|
47.2 (2008)
country
comparison to the world:
34
36.7 (1996)
|
|
Budget:
|
revenues: $2.3
billion
expenditures: $3.7
billion (FY10)
|
|
Inflation rate
(consumer prices):
|
13.2% (September 2009
est.)
country
comparison to the world:
210
7.7% (2008 est.)
|
|
Central bank
discount rate:
|
6.5% (31 December
2009)
country
comparison to the world:
64
6.5% (31 December
2008)
|
|
Commercial bank
prime lending rate:
|
NA%
|
|
Stock of money:
|
$2.53 billion (31 July
2009)
country
comparison to the world:
86
$2.106 billion (31
December 2008)
|
|
Stock of quasi
money:
|
$7.49 billion (1 April
2009)
country
comparison to the world:
71
$6.99 billion (31
December 2008)
|
|
Stock of domestic
credit:
|
$6.11 billion (31
December 2009 est.)
country
comparison to the world:
86
$5.556 billion (31
December 2008)
|
|
Market value of
publicly traded shares:
|
$5.721 billion (31
December 2009 est.)
country
comparison to the world:
81
$4.894 billion (31
December 2008)
$4.909 billion (31
December 2007)
|
|
Agriculture -
products:
|
pulses, rice, corn,
wheat, sugarcane, jute, root crops; milk, water
buffalo meat
|
|
Industries:
|
tourism, carpets,
textiles; small rice, jute, sugar, and oilseed
mills; cigarettes, cement and brick production
|
|
Industrial
production growth rate:
|
1.8% (FY08)
country
comparison to the world:
55 |
|
Electricity -
production:
|
2.6 billion kWh (2009
est.)
country
comparison to the world:
128 |
|
Electricity -
consumption:
|
2.243 billion kWh
(2007 est.)
country
comparison to the world:
132 |
|
Electricity -
exports:
|
0 kWh (2009 est.)
|
|
Electricity -
imports:
|
213 million kWh (2008
est.)
|
|
Oil - production:
|
0 bbl/day (2009 est.)
country
comparison to the world:
156 |
|
Oil - consumption:
|
18,000 bbl/day (2008
est.)
country
comparison to the world:
129 |
|
Oil - exports:
|
0 bbl/day (2007 est.)
country
comparison to the world:
160 |
|
Oil - imports:
|
16,920 bbl/day (2007
est.)
country
comparison to the world:
120 |
|
Oil - proved
reserves:
|
0 bbl (1 January 2009
est.)
country
comparison to the world:
152 |
|
Natural gas -
production:
|
0 cu m (2009 est.)
country
comparison to the world:
159 |
|
Natural gas -
consumption:
|
0 cu m (2009 est.)
country
comparison to the world:
160 |
|
Natural gas -
exports:
|
0 cu m (2009 est.)
country
comparison to the world:
87 |
|
Natural gas -
imports:
|
0 cu m (2009 est.)
country
comparison to the world:
150 |
|
Natural gas -
proved reserves:
|
0 cu m (1 January 2009
est.)
country
comparison to the world:
153 |
|
Current account
balance:
|
$537 million (2009)
country
comparison to the world:
46
$241 million (2008)
|
|
Exports:
|
$907 million (2008)
country
comparison to the world:
153
$868 million (2008)
|
|
Exports -
commodities:
|
clothing, pulses,
carpets, textiles, juice, pashima, jute goods
|
|
Exports - partners:
|
India 54.8%, US 9.7%,
Bangladesh 9.2%, Germany 4.7% (2008)
|
|
Imports:
|
$3.626 billion (2009)
country
comparison to the world:
129
$3.229 billion (2008)
|
|
Imports -
commodities:
|
petroleum products,
machinery and equipment, gold, electrical goods,
medicine
|
|
Imports - partners:
|
India 55.2%, China
13.4%, Singapore 2% (2008)
|
|
Debt - external:
|
$4.5 billion (2009)
country
comparison to the world:
105
$3.285 billion (2008)
|
|
Stock of direct
foreign investment - at home:
|
$NA
|
|
Stock of direct
foreign investment - abroad:
|
$NA
|
|
Exchange rates:
|
Nepalese rupees (NPR)
per US dollar - 77.44 (2009), 65.21 (2008), 70.35
(2007), 72.446 (2006), 72.16 (2005)
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