According to the report, Bagmati Province is the sole dominant in Nepal's economy while Madhes Province and Karnali Province are lagging behind in economic indicators. The size of Nepal's economy is expected to reach Rs 6.6 trillion in consumer prices in the current fiscal year 2082/83. The census began in 2075/76 BS after the implementation of federalism with the objective of measuring the economic activities at the provincial level. The report shows that the economic gap between the seven provinces of Nepal is still deep.
Bagmati dominates the size of the economy
According to the National Statistics Office, Bagmati Province will have a 36.7 percent share in the total Rs 6.6 trillion economy. As Bagmati Province is the capital and main commercial center of the country, its contribution is much higher than that of other provinces.
After Bagmati, Koshi Province is the second largest contributor to the country's economy. Koshi's share is estimated to be 15.8 percent (Rs 1.043 trillion). Lumbini Province will contribute 14.2 percent (Rs 937 billion), Madhesh Province 13.1 percent (Rs 863 billion), Gandaki Province 9.0 percent (Rs 593 billion) and Sudurpaschim Province 7.0 percent (Rs 464 billion). Karnali Province is the smallest province in terms of the size of the country's economy with a contribution of 4.2 percent (Rs 277 billion).
Economic growth rate: Bagmati, Gandaki ahead, Madhes behind
The country's overall economic growth is estimated to be 3.85 percent in consumer prices. Likewise, the growth rate of Bagmati and Gandaki provinces is expected to be above the national average. Bagmati Province is projected to achieve 5.40 percent economic growth while Gandaki Province is projected to achieve 5.01 percent economic growth.
On the other hand, the economic growth rate of Madhesh Province is expected to slow down to the lowest at 1.31 percent. Other provinces will see growth rate of 3.28 percent in Sudurpaschim Province, 3.13 percent in Koshi, 2.94 percent in Karnali Province and 2.87 percent in Lumbini Province. The main reason for the low growth rate of Madhesh Province is that the growth rate of the agricultural sector in Madhes Province is negative (-1.26 percent).
Huge disparity in per capita income
The country's average per capita GDP is expected to reach USD 1,513. However, on a provincial level, there is a huge disparity. Except for Bagmati and Gandaki provinces, the average income of the citizens of all the five provinces is below the national average.
Bagmati Province: USD 2,644 (highest)
Gandaki Province: USD 1,651
Koshi Province: USD 1,410
Lumbini Province: USD 1,208
Far-Western Province: USD 1,170
Karnali Province: USD 1,108
Madhesh Province: USD 934 (lowest)
This data shows that the average income of the citizens of Madhes Province is almost three times less than that of Bagmati Province. This exposes the huge gap in provincial prosperity.
What is the dominance of agriculture and trade?
Agriculture still plays an important role in Nepal's economy. According to the statistics, apart from Bagmati Province, agriculture contributes the most to the economy of all 6 provinces. The contribution of wholesale and retail trade is highest (21.7%) in Bagmati Province. This province seems to have developed as a center of service and trade. The contribution of agriculture to Madhesh Province is 34.97 percent, but the growth rate of this sector is negative. Similarly, the contribution of agriculture in Koshi and Lumbini provinces is above 30 percent. Public administration and defense sector is seen as the second largest share in Gandaki and Karnali provinces.
Notably, the electricity and gas sector is expected to grow at the highest rate of 20.93 percent at the national level this year. Power sector is the fasted growth sector in Koshi, Madhes, Bagmati, Gandaki and Lumbini provinces. However, the growth rate of financial and insurance services in Karnali and Sudurpaschim is higher than in other regions.
Province-wise detailed analysis
Koshi Province: Agriculture contributes 32.5 percent to Koshi Province with a total economy of Rs 1.043 trillion. The electricity and gas sector is expected to grow at the highest rate of 23.76 percent.
Madhesh Province: Although the share of agriculture sector is the highest (34.97%) in Madhes with a total economy of Rs 863 billion, shrinking in production has affected the growth rate of the entire province. The contribution of mining and quarrying is the lowest (0.14%).
Bagmati Province: With a huge economy of Rs 2.423 trillion, this province is dominated by business. The electricity and gas sector is expected to grow by 22.88 percent in the current fiscal year. However, the growth rate of public administration and defense sector will be low (0.61 percent).
Gandaki Province: With a total economy of Rs 593 billion, Gandaki has a good share of agriculture (25.7%) and public administration. Its growth rate has increased by above 5 percent due to the tourism and service sector.
Lumbini Province: Agriculture contributes 29.8 percent to Lumbini Province with a total economy of Rs 937 billion. Here too, the power sector has made good progress, but the growth rate of public administration is estimated to be somewhat negative (-0.19%).
Karnali Province: Despite being a small economy of Rs 277 billion, the growth rate of financial and insurance services in Karnali (6.54%) is encouraging. The contribution of agriculture is 31.52 percent.
Far-Western Province: Agriculture accounts for 33.4 percent of the total economy of Rs 464 billion. The financial sector is expected to grow by 7.98 percent, but the growth rate of public administration is negative.
Challenges to Policy Making
According to Dinesh Bhattarai, director of the statistics office, the report will help in policy formulation to reduce social and economic inequality among the provinces.
Although the progress of Bagmati and Gandaki provinces is encouraging, the fact that provinces like Madhes, Karnali and Sudurpaschim are still far below the national average point out the need for more coordination and targeted economic programs between the federal and provincial governments. In Madhesh Province, the negative growth rate of agriculture and the percapita income of less than USD 1,000 have posed serious challenges to food security and poverty alleviation.
The rapid growth seen in the electricity sector has given hope that the country is becoming self-sufficient in energy and this will support industrial expansion. These figures will be revised further in the coming years, the office said.
