Finance Minister Barsha Man Pun on Sunday claimed that the county’s economic indicators are improving, despite the ongoing political turmoil gripping the country just two days before the budget presentation.

The uncertainty surrounding the future of the government has unnerved the country's economy.

Prime Minister Pushpa Kamal Dahal on Sunday told Parliament that he prefers not to resort to issuing ordinances to bring the annual budget.

Dahal’s comrade Pun told lawmakers that despite the contraction in the manufacturing and construction sectors, growth in agriculture and services would help the country’s economy grow.

While presenting the Economic Survey for the current financial year 2023-24, Pun said the country would achieve growth of 3.87 percent in the current fiscal year ending mid-July, from 1.95 percent in the last fiscal year.

The survey report, which is generally presented a few days before the budget day, is the government's analysis of the economy. It generally covers the economic activities of the first eight months of the current fiscal year.

Pun attributed the growth rate to the performance of the agriculture sector, and tourism, which helped boost the accommodation and food services sector.

According to Pun, agriculture output is estimated to grow by 3.05 percent, and the non-agriculture sector by 3.75 percent. In the last fiscal year, the agriculture sector grew by 2.76 percent and the non-agriculture sector by 2.13 percent.

In the current fiscal year, paddy output has been projected to grow by 4.33 percent.

The economic survey said that of the total population, 62 percent are involved in agriculture. However, the contribution of the farm sector to the gross domestic product (GDP) has been steadily dropping.

The service sector's contribution is growing. In the current fiscal year, the sector's contribution to the national GDP has been projected at 62.9 percent, followed by agriculture at 24.09 percent and manufacturing at 13 percent.

Consumption has been growing.

The survey said that the contribution of consumption to the GDP had reached 92.4 percent, which means the ratio of savings to GDP is estimated to reach 7.6 percent.

The survey said that slowing capital expenditure and credit disbursement have curtailed overall investment.

According to the survey, the total investment by the private sector and the government has increased by a meagre 2.8 percent, to Rs1.74 trillion.

Despite low investment and poor economic growth, Nepal's per capita income, however, has been growing.

In the current fiscal year, the per capita national income is projected to grow to $1,456 from $1,405 in the last fiscal year.

The per capita GDP, or the country's economic output per person, is calculated by dividing a country's GDP by its population. It has been projected to reach $1,434 in the current fiscal year, up from $1,389 in the last fiscal year.

Finance Minister Pun claimed that inflation is under control. He said the government had kept inflation to 6.08 percent in the first eight months of the current fiscal year. It was 7.93 percent in the same period last fiscal year.

The survey said that banking transactions through digital means and access to finance are rising due to the promotion of financial literacy.

According to the survey, the number of mobile bank users reached 23.78 million in the first eight months of the current fiscal year, while there were 1.87 million internet banking users.

Based on the branches of banks and financial institutions, including microfinance institutions, there are an average of 2,515 people per branch.

The finance minister said the country's banking system has adequate liquidity, and interest rates are dropping. As of mid-March, the average interest rate on deposits was 6.74 percent, while interest on credit was 10.78 percent. In the same period last fiscal year, the interest rates on deposits and credits were 8.37 percent and 13.03 percent, respectively.

Until mid-March or the first eight month period of the current fiscal year 2023-24, a total of 130,844 borrowers have benefited from concessional loans, amounting to Rs149.30 billion. Most of the loans were mobilised on commercial agriculture and livestock, amounting to Rs107 billion.

The survey said that the capital market has recovered to an extent. Until mid-March, the Nepal Stock Exchange (Nepse) index reached 2,108.72 points, compared to 1953.06 points in mid-March 2023.

The stock exchange's market capitalisation climbed to Rs3.31 trillion in the review period, up from Rs2.82 trillion in mid-March 2023.

In the first eight months of the current fiscal year, collection of insurance premiums increased by 4.4 percent, to Rs124.89 billion. Insurance coverage has reached 43.16 percent of the population, including Foreign Employment Term Life Insurance Policies.

As of mid-March, there are 31,450 cooperatives in Nepal, with 7.38 million members. In the review period, deposit mobilisation in cooperatives amounted to Rs478 billion, while credit mobilisation stood at Rs405 billion.

The survey said that until mid-March, the number of Nepali workers receiving approval for foreign employment permits had reached 5.92 million since Nepal started issuing such permits in the mid-1990s

The number of people living below the poverty line has declined to 20.27 percent in 2023. In 2011, this was over 25 percent. According to the survey, 24.66 percent of the poor live in rural areas, and 18.34 percent are in urban areas.

The survey said 1.19 million Nepalis were enrolled in the government's social security fund as of mid-March, and the number of institutions listed in the fund had reached 18,755.

The national highway’s total length has reached 34,267 km. Of this, 53 percent has been blacktopped, 22.5 percent are gravel roads, and 24.3 percent are dirt roads.

In the first eight months of the current fiscal year, 28 km of road have been added, 190 km of roads have been upgraded to gravel, and 189 km have been blacktopped.

The survey said that the Investment Board Nepal, the Department of Industry, and Cottage and the Small Industry Development Board had approved Rs50.11 billion in investments as of mid-March.

Similarly, as of mid-March, the foreign direct investment stock (the amount of money invested from abroad) in Nepal reached Rs478.85 billion.

In the first eight months of the current fiscal year, the government has approved foreign direct investment (FDI) worth Rs29.13 billion.

Nepal received 1.01 million foreign tourists in 2023, up 65 percent from 2022. The average per capita spending of foreign tourists has been recorded at $41, while the average length of a tourist’s stay is 13.2 days, the survey said.

However, there is a big gap between what Nepal earns from foreign tourists and the amount Nepalis spend abroad. Under the travel heading, the gap between travel income and expenses is Rs71.43 billion—Nepal spent more than it earned in the travel sector.

The survey said Nepal is gradually moving toward becoming self-sufficient in energy. As of mid-March, 97.7 percent of the population had access to electricity, while the country's total electricity output had reached 3,060 MW.

Climate change has become a burning issue.

According to the survey, 90 percent of total crop losses are related to climate change, and climate change-induced losses range from 10 to 30 percent.

The survey said that the National Food Security Storage and SAARC Food Security Store had reserves of 997 tonnes and 8,997 tonnes of food grain, respectively, in the review period.

In the current fiscal year, the demand for chemical fertiliser is estimated to be around 600,000 tonnes.

Out of the total demand, 360,000 tonnes are estimated to be for urea, 220,000 tonnes for DAP, and 20,000 tonnes for potash. In the review period, 270,600 tonnes of chemical fertilisers were imported and sold.

The survey said the irrigation system was extended to an additional 1,640 hectares of land in the first eight months of the current fiscal year, reaching 88.5 percent of the total 1.76 million hectares of irrigable land.

However, of Nepal's total arable 2.64 million hectares, irrigation coverage has reached 59 percent.

In the review period, the survey said that 45.31 percent of Nepal’s total land is covered with forest, including bushes and buffer zones.

Nepal has only 1.15 doctors and 2.54 hospital nurses for every 1,000 people.

The total number of registered health workers, including doctors and nurses, in the country is 102,686. The total number of health institutions, including 215 hospitals, has reached 7,858.

The survey said that as of mid-March, 35,143 people received free treatment for critical illnesses like cancer, heart disease, and kidney disease.

Likewise, 2.39 million people are covered by life insurance.

The survey said that 96.75 percent of the population has access to drinking water. However, only 27.76 percent have access to quality drinking water.

Women's representation in government services, which was 12 percent a decade and a half ago, has reached 28.5 percent. The highest number of them are in health services, commanding a 49.7 percent share of the total employment.