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Nepal's industrial sector suffers negative growth for the first time in 7 yrs

Xinhua, May 26, 2016 Adjust font size:

Nepal's industrial sector witnessed negative growth for the first time in last seven years as industrial production was affected badly by four and half month long blockade in southern border points, a survey report of the Nepalese government revealed.

Economic Survey 2015-16 presented by Nepalese Finance Minister Bishnu Poudel at the parliament on Thursday stated that the industrial sector suffered the negative growth of 6.3 percent after suffering negative growth of 0.6 percent in fiscal year 2008-09 earlier.

The service sector's growth also remained the lowest in a decade as it is expected to grow by just 2.7 percent this fiscal year.

Two days ahead of the presentation of budget for next fiscal year 2016-17 which begins in July, Poudel presented the document about state of economy to the parliament which showed the gloomy picture of the Nepalese economy. As per the survey report, Nepalese economy suffered 14-year low growth of 0.77 percent.

Industries registration, investments as well as foreign direct investment (FDI) suffered decline in current fiscal year as the Himalayan country went through prolonged unrest in Tarai, trade blockade and disruption in supply, according to the survey.

The survey report shows that a total of 219 industries were registered in the first eight months of this fiscal against 462 of last fiscal year.

Nepalese private sector has said that political crisis and blockade following the new constitution promulgation on Sept. 20 last year as well as worsened power crisis were mainly responsible for the state of industrial sector.

Pashupati Murarka, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), told Xinhua that there was no environment of making investment confidently as political crisis in Nepal's southern Tarai is yet to be resolved.

"Investors will stay away from making more investment as long as the private sector sees the probability of another round of agitation in main industrial belt in southern Tarai," he said. Endit