KATHMANDU — Economic growth in the Karnali and Sudurpashchim provinces is projected to remain below the national average for the fiscal year 2082/83, according to separate provincial economic activity reports released by the Nepal Rastra Bank on Friday. The report estimates that Karnali’s economic growth rate will reach 2.94 percent, while Sudurpashchim is expected to see a growth of 3.28 percent. These figures fall short of the projected national economic growth rate of 3.85 percent, trailing by 0.91 and 0.57 percentage points, respectively. Analysts suggest these figures highlight persistent regional economic imbalances and a sluggish expansion in production. In Karnali, the economy is heavily reliant on the service sector, which accounts for 58.41 percent of the provincial economy. The industrial sector remains weak, contributing only 10.07 percent, with capacity utilization limited to 30.98 percent. Furthermore, the industrial sector received only 7.24 percent of the total credit flow in the province. The agricultural sector contributes 32.52 percent, and the region saw a 27.68 percent decline in foreign tourist arrivals. Sudurpashchim’s economy is also dominated by the service sector, which holds a 52.66 percent share, followed by agriculture at 33.43 percent and industry at 13.91 percent. Despite a 2.11 percent reduction in the area covered by major crops, agricultural production in the province increased by 0.82 percent. While the production of pulses, oilseeds, and soybeans rose, the output of buckwheat and barley declined. The industrial sector in Sudurpashchim reported an average capacity utilization of 51.29 percent, with 16.96 percent of total credit allocated to the sector. The report identifies several challenges hindering growth in both provinces, including the lack of marketing for agricultural produce, transportation difficulties, adverse weather conditions, and limited access to quality education, health, and communication services. In Sudurpashchim specifically, the report notes that declining agricultural credit, underutilized industrial capacity, low hotel occupancy rates, and low capital expenditure are significant obstacles. Despite these challenges, the report highlights potential opportunities for economic development. For Karnali, it suggests upgrading the Bheri Corridor, Karnali Corridor, and Karnali Highway to boost tourism in areas such as Rara, Shey Phoksundo, Limi Valley, and the Kailash Mansarovar region. Other opportunities include establishing herbal processing centers, branding indigenous agricultural products, developing forest-based industries, and systematically extracting natural gas and petroleum deposits in Dailekh. For Sudurpashchim, the report emphasizes the potential for expanding commercial agriculture and increasing industrial capacity utilization. It also identifies the presence of banks and financial institutions as a key opportunity for effective resource mobilization to drive future economic growth.
Article source: Gorkhapatra National Daily | Image credit: Gorkhapatra National Daily