Sudurpaschim Province's Economic Growth Stagnates Despite GDP Increase

Birendra Bhatt, Dhangadhi:  The economy of Sudurpaschim Province was projected to reach NPR 3 trillion 39 billion in the fiscal year 2079/80, but current estimates for the ongoing financial year indicate a rise to NPR 4 trillion 4 billion.

Despite this apparent growth in Gross Domestic Product (GDP), significant economic improvement remains elusive. In the current financial year, Sudurpaschim Province has not witnessed substantial enhancement in its economic activities.

The economic growth rate, based on consumer prices, is estimated to be 3.41 percent. This marks an increase from the previous fiscal year but still falls short compared to the growth rate in 2078/79. The province's contribution to the national economy is significant but not sufficient to signal robust economic health.

With the national economy expected to reach NPR 57 trillion, Sudurpaschim is projected to contribute 7.1 percent. Agricultural and wholesale and retail trade sectors dominate this contribution, underscoring their pivotal roles in the regional economy.

In contrast, sectors such as public administration and defense are the second highest contributors, whereas administrative support service activities have the least impact on the GDP. This uneven sectoral contribution highlights the challenges in diversifying and strengthening the province's economic base.

Revenue collection has been particularly troubling, with significant shortfalls reported since the previous year. The government is increasingly reliant on debt to cover current expenditures, indicating a growing fiscal imbalance.

The National Statistics Office reports that the total public debt has surged to NPR 23 trillion 97 billion. With an urgent need for reliable financial resources and strategic policy interventions, the current economic strategy must evolve.

The province faces an impending need to secure public debt for capital and financial management expenses, exacerbating the annual increase in loan size. The economic outlook for Sudurpaschim Province remains precarious. Policymakers must address the sluggish economic conditions through effective budgetary measures and innovative economic policies to stabilize and spur growth in the region.