Top 10 Economic Activities by Annual Growth Rate of GDP 2019/20

Last updated on 2024-04-27

Economic activities include any activities linked to the production, distribution, marketing, and sale of products or services. Such activities will contribute to the value-added of the national production. Nepal is one of the world's least developed countries, relying heavily on international help. Agriculture is the most important sector of the economy, employing more than 70% of the workforce and accounting for 33% of GDP. Because Nepal contains the highest mountains in the world, tourism has grown in significance and is a significant source of money. In addition, the government has been concentrating on harnessing hydroelectric electricity.

*The ranking is done based on data collected from the Central Bureau of Statistics.

10. Construction

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The construction industry is considered the backbone of nation-building since it contributes more than 70% of gross capital creation. In Nepal, this industry accounts for more than 8% of GDP and is growing at a faster pace than the national average. This industry is a significant contributor to the country's growth process. The diverse spectrum of production serves as the foundation for the social and economic growth of various areas. Furthermore, it fosters considerable economic development through its backward and forward links with industries such as manufacturing, transportation, and others. Following the establishment of the Construction Classification Regulation in 1975, contractors were licensed and classified as Class A, B, C, and D based on their physical facilities, resources, and experience, which was amended in 1994 and 1999. According to National Economic Census statistics, the construction sector has an annual GDP growth rate of 2.48 percent.

Annual Growth Rate of GDP : -0.31

9. Wholesale and Retail Trade

Image Source: Nepali Times

Wholesalers are "middlemen" who offer commodities to industrial or commercial consumers such as stores, restaurants, manufacturers, or construction firms. Retailers are distinguished by the fact that they sell items primarily to customers or homes. The wholesale and retail trade business, one of the key service sector industries, grew by 66.0 percent from 2011-12 to 2018-19, with an average annual growth rate of 7.5 percent. The wholesale and retail trade industry's value contributed has continuously increased, rising from Rs. 78,967 million in 2012-13 to Rs. 131.079 million in 2018-19 at 2001 prices. During the same time, the average growth rate of the wholesale and retail trade industry was 7.5 percent, which was much greater than the GDP growth rate (5.1 percent). According to National Economic Census statistics, wholesale and retail trade activities have an annual GDP growth rate of 2.11 percent.

Annual Growth Rate of GDP : 2.11

8. Agriculture and Forestry

Image Source: International Institute for Environment and Development

Agriculture continues to be a significant contributor to the Nepalese economy. Almost four-fifths of all Nepalese households are fundamentally farm households1, with farm revenue and agricultural wage income accounting for roughly half of total income. This sector, which employs two-thirds of the working force, produces almost one-third of the GDP. As a result, agricultural expansion has a great potential to have a substantially broader influence on poverty reduction and inclusivity. Forestry is an essential component of agricultural and rural livelihoods, and fuelwood is the primary source of rural energy in Nepal, where forest covers 40.36 percent of the total land area and shrubs cover 4.38 percent. It is estimated that the forestry sector alone accounts for 15% of the country's GDP. The forest sector employs 9.23 percent of the total workforce in the country. According to National Economic Census statistics, Forestry and agricultural activities have an annual GDP growth rate of 2.48 percent.

Annual Growth Rate of GDP : 2.48

7. Real Estate, Renting and Business Activities

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Real estate has been one of the primary industries consuming a sizable portion of bank loans. Until recently, investment in the real estate sector in Nepal has been expanding due to a lack of alternative investment opportunities in the nation. The growth in land demand, particularly in metropolitan areas, is ascribed to an inelastic supply of land and a lack of suitable investment opportunities. Various private real estate developers and housing businesses are now participating in the building of low-cost houses, flats, and commercial complexes. For such funding, they often engage in partnerships with banks and financial organizations. During the previous three years, the average ratio of worker remittances to GDP has been at 20.0 percent. In the previous five years, the construction sub-sector has grown at a reasonable pace of 4.5 percent on average, contributing 6.7 percent to GDP. According to National Economic Census statistics, real estate, renting, and business activities have an annual GDP growth rate of 3.25 percent.

Annual Growth Rate of GDP : 3.25

6. Education

Image Source: BORGEN Magazine

The most significant successes in Nepal's education system are related to Education for All (EFA) Goals 1 and 2. Concerning EFA 1, Nepal increased and strengthened comprehensive early childhood care and education. Goal 2 of the EFA is to ensure that all children, particularly females and children from disadvantaged ethnic groups, have access to and finish free and compulsory primary education of high quality. A government report for the current fiscal year shows the total number of students in the last academic year was 7.02 million, which is around 200,000 less than the previous year. The survey report says the number of students at the school level has decreased by 520,771 between 2014 and 2020. Education experts agree that an increase in the student promotion rate, which decreases students' stay in schools, and the plunge in population growth rate has resulted in a slide in enrolment. According to National Economic Census statistics, the educational sector has an annual GDP growth rate of 4.88 percent.

Annual Growth Rate of GDP : 4.88

5. Financial Intermediation

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Financial intermediaries function as a go-between for two parties involved in a financial transaction. It can be classified into the following types: Insurance firms, financial counselors, credit unions, mutual funds, brokers, stock exchanges, and pension funds are all examples businesses. In the context of Nepal, Nepalese authorities have made significant progress in establishing the foundation for financial stability. Financial intermediaries have been assisting people by providing low-interest loans. Their e-banking service allows customers to do transactions from any internet-connected device, removing the need to visit a bank. Furthermore, they have contributed to an economy's saving and investment cycle by acting as financing conduits between borrowers and lenders. According to National Economic Census data, activities related to financial intermediation has a 5.15 percent annual GDP growth rate.

Annual Growth Rate of GDP : 5.15

4. Public Administration and Defense

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Popular administration, as an essential component of the government system, has frequently been the target of public criticism in Nepal. However, in accordance with the 2015 Constitution, Nepal's public administration began working in a federalized structure. The unitary administrative framework has been reorganized with the turnover of around 8,000 centrally managed offices to the seven provincial and 753 local governments as part of the reorganization of the state into three realms: federal, provincial, and municipal. The Ministry of Defence, on the other hand, is a governmental agency in Nepal that formulates defense policy and manages defense issues with other government departments and the Nepal Army controlled by the Right Honourable Prime Minister Sher Bahadur Deuba. According to National Economic Census statistics, the public administration and defense sector has an annual GDP growth rate of 6.91 percent.

Annual Growth Rate of GDP : 6.91

3. Health and Social Work

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Social work is a profession that assists individuals in overcoming some of life's most difficult obstacles, including poverty, prejudice, abuse, addiction, physical sickness, divorce, loss, unemployment, educational issues, disability, and mental illness. In Nepal, social work is a relatively new career. St. Xavier's College in Kathmandu established social work as an academic field in 1996. Nepalese social workers are the agents of change in Nepalese society. Similarly, there has been a substantial achievement in various areas of health care delivery in Nepal during the last twenty years, particularly in the fields of child health and infectious disease control. According to National Economic Census statistics, health and social work activities have an annual GDP growth rate of 7.07 percent.

Annual Growth Rate of GDP : 7.07

2. Fishing

Image Source: Nepal Travel Guide

Nepal is a landlocked nation. It has a big number of rivers with a permanent water supply from melting Himalayan snows, a significant number of lakes, a few reservoirs, a rising number of fish ponds and irrigated farms, and marginal wetlands. All of these are appropriate for fisheries development. Significant development has been made in the fisheries sub-sector as His Majesty's Government of Nepal has prioritized fisheries over the previous few decades. Nepal has 186 types of indigenous and alien fish. The country's fish output has grown from 750 t/year in 1981/82 to 10,300 t/year in 1995/96. Currently, Nepal's fisheries contribute to roughly 1.5 percent of the agricultural part of the country's GDP. According to National Economic Census statistics, activities connected to fishing have the second greatest annual GDP growth rate of 7.17 percent.

Annual Growth Rate of GDP : 7.17

1. Electricity, Gas and Water

Image Source: Avinash Group Nepal

The energy industry is critical to economic development. Nepal's failing power system, with an insufficient and unpredictable supply of low-quality energy, was a serious development impediment. Recent improvements in energy supply to the industrial and service sectors are seen to have contributed to improved economic growth. Nepal has exceptional water resource assets. It endows roughly 6,000 rivers totaling 45,000 kilometers in length (km). Based on available water resources, Nepal's technical hydropower potential has been assessed to be 83 gigatonnes (GW). According to National Economic Census statistics, activities connected to electricity, gas, and water have the greatest annual GDP growth rate of 28.75 percent.