KATHMANDU: Karnali Province recorded an economic growth rate of 2.94 percent in fiscal year 2082/83, below the national growth projection of 3.89 percent, according to a study conducted by Nepal Rastra Bank (NRB).
Karnali accounts for just 4.20 percent of Nepal’s national economy, making it the smallest contributor among the seven provinces. Its gross domestic product (GDP) at current prices is estimated at Rs 277.25 billion. The service sector accounts for the largest share at 58.41 percent, followed by agriculture at 31.52 percent and industry at 10.07 percent.
Agricultural performance remained mixed during the review period. Overall crop production declined by 0.65 percent, although the production of major food crops, including paddy, maize, wheat, millet, barley and buckwheat, increased by an average of 3.55 percent.
Meanwhile, vegetable and horticultural production fell by 3.76 percent, while fruit production declined by 4.05 percent. In the livestock sector, milk, egg and wool production increased, whereas meat and fish production decreased. Irrigation facilities cover only 41.90 percent of the province’s cultivated land.
Industrial activity also remained sluggish, with selected industries operating at an average capacity utilization rate of just 30.89 percent. Nevertheless, industrial lending increased by 25.63 percent to Rs 5.07 billion. Construction-related industries received the largest share, accounting for 35.99 percent of total industrial credit.
The tourism sector experienced a notable downturn, with foreign tourist arrivals declining by 27.68 percent to 22,163. The report attributed the decline mainly to reduced activities by non-governmental organizations and rising aviation fuel costs. Tourist arrivals from India, China and other countries also dropped significantly.
In the financial sector, the number of branches of banks and financial institutions in Karnali reached 481 by the end of Ashadh 2083. Total deposits increased by 22.03 percent to Rs 111.15 billion, while credit disbursement rose by 9.79 percent to Rs 66.85 billion.
Regarding infrastructure development, the province’s total road network extended to 4,392 kilometres. However, only 6.81 percent of the roads had been blacktopped, highlighting the continuing challenges in improving transport infrastructure.
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