Kathmandu, Feb 18 (IANS): The government of Nepal has slashed the economic growth forecast from 5.3 percent to 4.2 percent for the current fiscal year 2012-13.
Absence of a full budget coupled with feeble capital spending in the second half of the current fiscal year have been attributed as the major reasons for the decrease in the forecast, reported Xinhua.
"Though we arranged sufficient fund for some important projects, the overall government budget could not boost up the capital expenditure," Finance Minister Barsaman Pun Sunday said.
"This brought the growth forecast down from 5.3 to 4.2 percent," the minister said.
In the mid-term review period from July 2012 to January 2013, Nepal's capital expenditure recorded only Rs.7.66 billion (around $90 million) while regular expenditure stood at Rs.86.9 billion (around $1.02 billion).
Inflation stood at 10.7 percent, while revenue grew 21.2 percent in total.
In last December, the World Bank predicted Nepal's economy to grow 3.8 percent this year against 4.5 percent in the previous year. Sharp decline in paddy production and other sectors' average performance were cited as the reasons for lower forecast.
"The government forecast sounds a bit unrealistic and seems to have landed without proper research," economist Rewat Bahadur Karki told Xinhua.
"The present economic indicators show that the growth rate of 4.2 percent is not possible right now," he said.
"Nepal will have to struggle even to achieve what the World Bank has predicted," added Karki, who is also a former economic advisor to Nepal Rastra Bank, the country's central bank.