Economic Overview
General Economic Information:
Nepal is among the poorest and least developed countries
in the world with 42% of its population living below the poverty
line. Agriculture is the mainstay of the economy, providing a
livelihood for over 80% of the population and accounting for 40% of
GDP. Industrial activity mainly involves the processing of
agricultural produce including jute, sugarcane, tobacco, and grain.
Textile and carpet production, accounting for about 80% of foreign
exchange earnings in recent years, contracted in 2001-02 due to the
overall slowdown in the world economy and pressures by Maoist
insurgents on factory owners and workers. Security concerns in
the wake of the Maoist conflict and the September 11, 2001
terrorist attacks in the US have led to a decrease in tourism,
another key source of foreign exchange. Since 1991, the government
has been moving forward with economic reforms, e.g., by reducing
business licenses and registration requirements to simplify
investment procedures, reducing subsidies, privatizing state industries,
and laying off civil servants. Nepal has considerable scope for
exploiting its potential in hydropower and tourism, areas of recent
foreign investment interest. Prospects for foreign trade or investment
in other sectors will remain poor, however, because of the small size
of the economy, its technological backwardness, its remoteness, its
landlocked geographic location, and its susceptibility to natural
disaster. The international community's role of funding more than
60% of Nepal's development budget and more than 28% of total budgetary
expenditures will likely continue as a major ingredient of growth.
Population below poverty line:
42% (1995-96)
Unemployment Rate:
47% (2001 est.)
Industries:
Tourism, Carpet, Textile; Small rice, Jute, Sugar,
and Oilseed Mills, Cigarettes, Cement and Brick production
Natural Resources
quartz, water, timber, hydropower,
Scenic beauty, Small deposits of lignite, copper, cobalt, iron ore.
GDP:
Purchasing power parity - $37.32 billion (2002 est.)
GDP - Real Growth:
-0.6% (2002 est.)
GDP - Per Capita:
purchasing power parity - $1,400 (2002 est.)
GDP - Composition by Sector:
Agriculture: 40%
Industry: 20%
Services: 40% (2002 est.)
Industry: 20%
Services: 40% (2002 est.)