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NepalECONOMY
Salient Features: Underdeveloped with economy
tied to
India as result of geographic position and historical
relationship.
Predominantly agricultural; limited industrial activity;
services--
particularly related to tourism, growing part of economy.
In FY
1989, tourism provided more than 3.5 percent of GDP and
about 25
percent of total foreign exchange earnings. Services,
remittances
of Nepalese working outside the country, and foreign loans
and
grants finance the deficit. Economic prospects
poor--projected
population growth expected to outpace growth rate of
agricultural
production. Underemployment estimated at 25-40 percent in
1987;
unemployment averaged 5 percent. Foreign aid averaged 64
percent of
development from 1956-90; 44.4 percent of FY 1991 budget
from
foreign loans or grants. Real growth averaged 4 percent
annually in
early 1980s, almost 5 percent in late 1980s, but plummeted
to
between 1.5 percent and 2.3 percent in FY 1989 and FY 1990
because
of trade and transit dispute with India. No labor laws as
of 1991;
limited activity of labor unions, but trade unions
legalized
following prodemocracy movement.
Gross National Product: Per capita income for
1988
US$158-180 range.
Gross Domestic Product (GDP): US$3 billion in FY
1990.
GDP increase at constant prices averaged 3.7 percent
annually FY
1975-86; increased 2.1 percent in FY 1990. Foreign aid as
percentage of GDP increased from less than 8 percent in
1984 to
almost 13 percent in 1987. Major share of GDP from FY 1979
to FY
1987 from agricultural sector.
Agriculture: Dominated economy; livelihood for
more than
90 percent of population; approximately 60 percent GDP and
75
percent of exports in late 1980s. Some parts of country
food
deficit areas although enough generally produced to feed
population; production dependent on weather conditions--
particularly monsoons, distribution of inputs, scarcity of
new
lands, and continued environmental degradation. Tarai
Region main
agricultural belt. Paddy (rice) and corn major food crops,
also
wheat and millet; potatoes, oilseed, sugarcane, jute, and
tobacco
major cash crops.
Industry: Limited industrial base--less than 20
percent
of total GDP in 1980s; 7 percent in FY 1990--established
with
foreign aid. Industries used agricultural products and/or
dependent
on various imported inputs, particularly from India.
Traditional
cottage industries such as basket-weaving and production
of cotton
fabrics approximately 60 percent of output.
Manufacturing: Larger plants generally in public
sector.
Major industries include jute, sugar, cigarettes, beer,
matches,
shoes, chemicals, cement, and bricks. Small mineral
industry; most
commodities used for domestic construction; cement, clay,
limestone, garnet, magnesite, and talc most important
mineral
resources.
Energy: As of late 1980s, about 95 percent of
energy
consumed from traditional sources--fuelwood, 76 percent
(hence
deforestation). Tremendous potential for hydroelectric
power
inhibited by terrain, lack of infrastructure, and
insufficient
capital investment.
Foreign Trade: Traditionally predominantly with
India
although decreased from more than 70 percent in 1975 to 37
percent
of total trade in 1989. Also unrecorded border trade with
India. As
a result of trade and transit dispute, India's share of
exports, 25
percent in FY 1989, dropped to approximately 9 percent in
FY 1990;
imports fell to only 25 percent FY 1990. Persistent and
growing
trade deficit with India. Other primary trading partners
the United
States, Bangladesh, China, Britain, former Soviet Union,
West
Germany, South Korea, Japan, Singapore, Thailand, Hong
Kong, and
Pakistan. Major exports clothing, carpets, grain, and
leather
goods. Major imports petroleum products, fertilizer, and
machinery.
Balance of Payments: Improvement in 1980s as a
result of
foreign loans and assistance although increasing foreign
debt. Mid1989 , official foreign debt outstanding and disbursed
about US$1.3
billion. In FY 1988, exports US$187 million; imports
US$630
million.
Currency/Exchange Rate: 1 Nepalese rupee (NR) or
rupee
(R) = 100 paisa. Coins issued in denominations of 1, 5,
10, 25, 50
paisa, and 1 rupee; notes issued in denominations of 1, 5,
10, 100,
500, and 1,000 rupees. In 1989, Rs per US$1=27.19; in
1990, 29.37;
in January 1991, 30.8. Linked to Indian rupee.
Fiscal Year: 16 July-15 July.
Data as of September 1991
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