Saving habit of Nepalis to improve

May 29, 2017

The Himalayan Times, 29th My 2017, Kathmandu

The saving habit of Nepalis is expected to improve in this fiscal as compared to last fiscal, when it was the worst for two decades. Gross domestic savings as percentage of gross domestic product (GDP) is likely to stand at 10.3 per cent in the current fiscal year from last fiscal’s 3.82 per cent, according to the Economic Survey 2016-17 tabled by Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara in the Parliament today.

Along with the normalcy in economic activities that were affected for the last two consecutive fiscal years due to the devastating earthquake and supply line disruptions, production capacity has enhanced.

The size of the economy in this fiscal will stand at Rs 2,599.23 billion with a higher rate of economic growth of 6.94 per cent as projected by the Central Bureau of Statistics.

According to the survey, of the total goods and services worth Rs 2,599.23 billion that is likely to be produced in the economy in the current fiscal, around Rs 267.72 billion will probably be saved.

Along with improved gross domestic savings, gross capital formation is also expected to rise, which will enhance capacity to produce more goods and services in the economy. Gross fixed capital formation (GFCF) in current fiscal is predicted to rise by 45.8 per cent to Rs 1104.96 billion. Country’s GFCF is expected to stand at 42.5 per cent to GDP, as against 33.7 per cent of last fiscal.

Despite low government spending in development works, the GFCF has improved only due to normalcy in economic activities. As per the survey, the private sector is likely to contribute 78.5 per cent in the gross fixed capital formation and the public sector is expected to contribute 21.5 per cent.

Average gross domestic saving as percentage to the GDP stood at 10.15 per cent in the last 10 years, as per the survey.