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Economic growth and decline of Nepal?

Nepal is a small, landlocked country situated in the Himalayas, bordered by India and China. Nepal's economy has experienced both growth and decline over the years, influenced by various internal and external factors. In this article, we will explore the economic growth and decline of Nepal in recent times.

Economic Growth of Nepal

Nepal's economy has been growing at a steady pace in recent years. According to the World Bank, Nepal's GDP growth rate was 6.5% in 2019. This growth can be attributed to several factors, including:

Remittance: Remittances from Nepali citizens working abroad have been a significant source of income for Nepal. In 2019, remittances contributed around 26% of Nepal's GDP.

Agriculture: Agriculture is the backbone of Nepal's economy, employing around 70% of the country's population. The sector accounts for around 30% of the country's GDP.

Tourism: Tourism is another significant contributor to Nepal's economy, accounting for around 7.5% of the GDP. Nepal is known for its trekking, mountaineering, and adventure tourism.

Infrastructure Development: Nepal has invested significantly in infrastructure development in recent years, with projects focused on building roads, airports, and hydropower projects.

Economic Decline of Nepal

Nepal has also experienced economic decline in recent years. One of the main reasons for this decline has been political instability. Nepal has had a tumultuous political history, with the monarchy being overthrown in 2008, and the country transitioning into a republic. The country has since struggled to establish a stable government.

Another significant factor contributing to Nepal's economic decline is its dependence on India. Nepal's economy is highly reliant on India for trade, and any disruption in the supply chain can have severe consequences for the economy. For example, in 2015, India imposed an economic blockade on Nepal, causing severe shortages of fuel and other essential goods.

The COVID-19 pandemic has also had a significant impact on Nepal's economy. With a significant number of Nepali citizens working abroad, the pandemic has led to a decrease in remittances. The tourism industry has also been severely impacted, with borders being closed to prevent the spread of the virus.

Conclusion

In conclusion, Nepal's economy has experienced both growth and decline in recent years. While the country has made significant progress in areas such as infrastructure development and diversifying its economy, it remains vulnerable to political instability and external factors such as India's trade policies and the COVID-19 pandemic. Nevertheless, with a young and growing workforce, Nepal has the potential to continue to grow and develop in the coming years.
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