According to the economic situation report, the contribution of the industrial and agricultural sectors is declining and dependence on foreign employment is increasing.
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The Ministry of Finance has made public the current economic situation of Nepal. It has been stated that the situation paper has been prepared with the objective of providing a realistic picture of the country's current economic, social and governance situation and helping in determining the future course of action.
Finance Minister Swarnim Wagle had decided to prepare an 'economic situation paper' immediately upon assuming office on 13 Chaitra. The ministry has stated that the current economic situation paper has been prepared and made public accordingly.
The situation paper states that the country's economic growth is comparatively low and unstable. The average annual economic growth in the last decade has been 4.2 percent. During this period, Nepal's economy has expanded from a minimum contraction of 2.4 percent to a maximum expansion of 9 percent. 'The economy, which expanded by 4.61 percent in the fiscal year 2081/82 due to sluggish economic activity in recent years, is projected to expand by 3.5 percent in the fiscal year 2082/83,' the economic situation paper states.
The government itself has stated that the country's economy has expanded from agriculture to the service sector without industrialization. 'While the contribution of industry and the agricultural sector to the economy is shrinking, the contribution of the service sector is expanding,' the economic status paper states.
It is also stated that the condition of the manufacturing industry is weak. In a decade, the contribution of the manufacturing industry to the gross domestic product has averaged only 5.4 percent. During this period, while the overall economy expanded by an average of 4.2 percent, the expansion of the manufacturing industry has averaged only 2.9 percent.
The paper also states that the country's industrialization status is weak due to insufficient investment, high dependence on imported raw materials, low adoption of innovation and advanced technology, and high production costs. It also states that it will provide a strong basis for drawing the necessary roadmap for policy reforms, strengthening good governance, and sustainable economic transformation by clearly identifying current opportunities and challenges.
The government has stated that dependence on foreign employment is increasing . The lack of decent employment opportunities within the country has increased dependence on foreign employment . It is said that the number of Nepali workers who have obtained work permits to go abroad for employment has increased by an average of 28.6 percent annually in the last decade .
As the number of people going abroad for employment is high, the remittances they send have provided short-term relief in the external sector balance, poverty alleviation, internal demand and social sector . However, the economic situation paper states that the country has a shortage of skilled and semi-skilled manpower and a decrease in aggregate demand, which has also increased the risk of depletion of human capital in the long term .
