Economy - overview Nepal is among the poorest and least developed countries in the worldwith about 60% of the population living below the poverty line. Agricultureis the mainstay of the economy, providing a livelihood for over 80% of thepopulation and accounting for more than 40% of GDP. Industrial activity islimited, mainly involving the processing of agricultural produce includingjute, sugarcane, tobacco, and grain. Production of textiles and carpets has expanded recently and accounted for about 80% of foreign exchange earningsin the past two years. Apart from agricultural land and forests, exploitablenatural resources are mica, hydropower, and tourism. Agricultural productionis growing about 5% on average as compared with annual population growth of2.5%. Since May 1991, the government has been moving forward with economicreforms particularly those that encourage trade and foreign investment, e.g.,by eliminating business licenses and registration requirements in order tosimplify investment procedures. The government has also been cutting expendituresby reducing subsidies, privatizing state industries, and laying off civilservants. The government made some progress in 1996, signing trade agreementswith countries including India, and attracting substantial foreign investmentin hydropower. Prospects for foreign trade and investment in areas besideshydropower and tourism will continue to remain poor because of the small sizeof the economy, its technological backwardness, its remoteness, and its landlockedgeographic location highly susceptible to natural disaster. The internationalcommunity provides funding for more than 60% of Nepal's development budgetand more than 30% of total budgetary expenditures.

GDP purchasing power parity - $26.5 billion (1996 est.)

GDP - real growth rate 2.9% (FY95/96 est.)

GDP - per capita purchasing power parity - $1,200 (1996 est.)

GDP - composition by sector
agriculture: 42%
industry: 22%
services: 36% (1996 est.)

Inflation rate - consumer price index 9.2% (1996 est.)

Labor force
total: 9.2 million (1996 est.)
by occupation: agriculture 90%, services 7%, industry 3%
note : severe lack of skilled labor

Unemployment rate NA%; substantial underemployment (1996)

Budget
revenues: $645 million
expenditures: $1.05 billion, including capital expenditures of $NA (FY94/95 est.)

Industries tourism, carpet, textile; small rice, jute, sugar, and oilseed mills;cigarette; cement and brick production

Industrial production growth rate 14.7% (FY94/95 est.)

Electricity - capacity 280,000 kW 000 kW

Electricity - production 980 million kWh

Electricity - consumption per capita 48 kWh (1996 est.)

Agriculture - products rice, corn, wheat, sugarcane, root crops; milk, water buffalo meat

Exports
total value: $343 million (f.o.b., 1996 est.) but does not include unrecorded bordertrade with India
commodities: carpets, clothing, leather goods, jute goods, grain
partners : India, US, Germany, UK

Imports
total value: $1.3 billion (c.i.f., 1996 est.)
commodities: petroleum products 20%, fertilizer 11%, machinery 10%
partners: India, Singapore, Japan, Germany

Debt - external $2.85 billion (1996 est.)

Economic aid
recipient: ODA, $310 million (1993)
note: total bilateral and multilateral aid of $217 million in 1996

Currency 1 Nepalese rupee (NR) = 100 paisa

Exchange rates Nepalese rupees (NRs) per US$1 - 57.030 (January 1997), 56.692 (1996),51.890 (1995), 49.398 (1994), 48.607 (1993), 42.718 (1992)

Fiscal year 16 July - 15 July

NOTE: The information regarding Nepal on this page is re-published from the 1997 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Nepal Economy 1997 information contained here. All suggestions for corrections of any errors about Nepal Economy 1997 should be addressed to the CIA.